Industrial Output Registers Modest 0.3% Growth In May
Malaysia’s Industrial Production Index (IPI) registered a 0.3% increase in May 2025 year-on-year, a significant moderation from the 2.7% growth recorded in April. This slower expansion was primarily driven by a deceleration in the manufacturing sector, despite its continued positive output.
The Manufacturing sector saw its output grow by 2.8% in May, a notable slowdown from 5.6% in the previous month. While still the main contributor to the IPI’s positive trajectory, its reduced pace impacted the overall index. The Electricity sector rebounded to 0.4% growth after a 1.7% contraction in April, offering some support. However, the Mining sector continued its downward trend, plummeting by 10.2%, a steeper decline than the 6.3% fall in April. On a month-on-month basis, the IPI showed a positive turnaround, rising by 1.1% compared to a sharp 8.0% contraction in April.
Mixed Performance in Manufacturing Sub-sectors
Within the manufacturing sector, export-oriented industries experienced a slowdown, growing by 2.9% in May compared to 6.4% in April. This was largely influenced by a 4.8% decrease in the Manufacture of coke & refined petroleum products, which also contributed to a 5.0% decline in the country’s overall manufactured goods exports in May.
Conversely, the Manufacture of vegetable and animal oils & fats recorded a robust double-digit growth of 15.9%. Additionally, the Manufacture of computer, electronics & optical products and Manufacture of machinery & equipment n.e.c. continued to support the manufacturing sector’s growth, expanding by 6.0% and 5.7% respectively. Month-on-month, export-oriented industries showed a positive rebound, increasing by 5.3% after a 10.2% decline in April.
Domestic-oriented industries grew modestly by 2.6%, down from 3.9% in April. This slower growth was mainly attributed to a 10.1% decline in the Manufacture of motor vehicles, trailers & semi-trailers. In contrast, the Manufacture of food processing products saw a significant increase of 10.3%. Manufacturing output related to construction activities, specifically the Manufacture of fabricated metal products, except machinery & equipment, also increased by 3.7%. Month-on-month, domestic-oriented industries rose by 1.0% compared to 0.3% in April.
Mining Sector Continues Sharp Decline
The Mining sector’s output dropped by 10.2% in May, exacerbated by decreases in both Natural Gas (16.6%) and Crude Oil & Condensate (1.6%) production. On a month-on-month basis, the Mining index dipped by 12.8%.
For the first five months of 2025 (January – May), the IPI grew at a slower rate of 2.0% compared to 3.4% in the same period of 2024. This was primarily influenced by contractions in the Mining index (-5.1%) and Electricity index (-1.3%), while the Manufacturing index registered an increase of 4.1%.
Globally, other countries like China (5.8%), United States (0.6%), Singapore (3.9%), South Korea (0.2%), Taiwan (22.6%), Vietnam (11.0%), and Thailand (1.9%) all registered positive IPI growth in May. In contrast, Japan experienced a decline of 1.8%.
