Malaysia’s IPI to Grow 3%-4%, Driven by Manufacturing Sector
The country’s Industrial Production Index (IPI) is expected to sustain positive growth in 2025 with a projection of 3%-4%, following an estimated 3.4% expansion in 2024.
“The expansion was supported by the manufacturing sector, which expanded 4.6% (October 2024: 3.3%), coupled with the rise of 3.9% in electricity output (October 2024: 1.9%).
“But the mining sector production remained on a downward trend, albeit with a smaller negative growth of -0.8% in November 2024 (October 2024: -2.8%),” said Department of Statistics (DOSM) chief statistician Datuk Seri Dr Mohd Uzir Mahidin, adding that the IPI grew 0.5% month-on-month.
Uzir also pointed out that the output for the export-oriented industries – which accounted for two-thirds of the manufacturing sector – expanded by 5.6% in November 2024, compared to 3.3% in the previous month.
Nevertheless, the domestic-oriented industries continued to grow modestly at 2.6% after registering a growth of 3.3% in October 2024.
“At the same time, the mining sector’s production edged down by 0.8%, influenced by a decline in the crude oil and condensate index which dropped by -3.8% (October -7.5%) while the natural gas index increased 1.2% (October 2024: 0.4%),” he added.
Meanwhile, MIDF Amanah Investment Bank Bhd highlighted a potential upside to its own 2024 IPI growth estimate, also citing stronger-than-expected manufacturing output in November 2024, as the first 11 months of the year showed an average growth of 3.7% year-on-year (YoY).
“We expect production activities to grow further as we assume domestic economic growth will remain positive and external demand will continue to increase, despite a few concerns and uncertainties,” it said in a research note.
However, the bank warned of potential headwinds for manufacturing firms if demand weakens, considering that global trade could face challenges from escalating geopolitical and trade tensions, disruptions in global supply chains and rising production costs.
