Manufacturing industry operating at 79.6% capacity utilisation in 1Q23

MALAYSIA’S manufacturing industry operated with a 79.6% capacity utilisation in the first quarter of 2023 (1Q23), the Department of Statistics Malaysia (DoSM) said. 

Chief statistician Datuk Sri Dr Mohd Uzir Mahidin said the manufacturing industry capacity utilisation statistic is a new indicator released by DoSM which would provide users with another viewpoint in assess- ing the performance of the manufacturing sector in Malaysia. 

“This report presents statistics for 2015 until 1Q23 at the national and state levels. 

“Capacity utilisation refers to the ratio of actual output produced to the production of output at full capacity through an optimal combination of machinery, raw materials and labour,” he said in a statement last Friday. 

Mohd Uzir said the capac-facturing industry for 2015 to 2022 was in the range of 69.8% to 80.4%. 

“The lowest utilisation rate of the manufacturing following the implementation of a Movement Control Order due to the Covid-19 pandemic, while a high utilisation rate above 80% was 2022 with a rate of 80.1%, 80.2% and 80.4%, respectively,” he said. 

Mohd Uzir said the manufacturing industry in 1Q23 operated with a capacity utilisation of 79.6%, lower by 1.5 percentage points compared to a year ago of 81.1%. 

“The downturn was primarily attributable to decreases in almost all sub-sectors except for transport equipment and other manufactures,” it said. 

The chief statistician said the manufacturing industry’s monthly capacity utilisation rate picked up in March 2023, reaching 80.6% after two months of operating below 80% of capacity, which was 79.2% (January 2023) and 79.1% (February 2023). 

“On the other hand, the capacity utilisation rate was lower compared to the same month of the preceding year, contributed by low demand, insufficient supply of materials, as well as repair and maintenance of machinery and equipment,” he said. 

Meanwhile, Mohd Uzir said the highest capacity utilisation rate in 1Q23 was recorded by the sub-sector of transport equipment and other manufactures with 84%, which increased by three percentage points year-on-year (YoY), followed by the manufacture of petroleum, chemical, rubber and plastics. 

He said the domestic-oriented industry registered a capacity utilisation rate of 80.5% in 1Q23, which increased slightly by 0.04 percentage points compared to 1Q22. 

“However, capacity utilisation in the export-oriented industry declined by two percentage points YoY to 79.3% this quarter. 

“The manufacturing industry in six states operated at a capacity exceeding 80%, namely Federal Territories of Labuan (93.3%), Kedah (83.8%), Sarawak (81.6%), Melaka (81.4%), Negri Sembilan (81.1%) and Johor (80.4%),” he added. Bernama / pic MUHD AMIN NAHARUL

  • This article first appeared in The Malaysian Reserve weekly print edition