Manufacturing at 79.8 pct operating capacity in 4Q

KUALA LUMPUR: The manufacturing industry operated at 79.8 per cent capacity in the fourth quarter of 2023 (4Q23), edged down by 0.4 percentage points, from a rate of 80.2 per cent in 4Q 2022, said the Department of Statistics Malaysia (DOSM).

In a statement yesterday, chief statistician Datuk Seri Mohd Uzir Mahidin said a lower capacity utilisation of the manufacturing industry was primarily attributable to decreases in the sub-sector of petroleum, chemical, rubber and plastic products (-4.2 percentage points); and electrical and electronic products (-0.5 percentage points).

The manufacturing industry operated at 79.4 per cent capacity utilisation in 3Q23, down 1.9 percentage points year-on-year (y-o-y) while expanding every quarter.

He noted that the utilisation rate in the manufacturing industry exceeded 80 per cent for two consecutive months, operating at 80.4 per cent in October 2023 and 80.1 per cent in November 2023, while the capacity utilisation rate for December 2023 dropped to 78.9 per cent.

“The decline in the capacity utilisation rate in 4Q 2023 mirrored the trend of the manufacturing industrial production Index, which slipped by 0.2 per cent (3Q23: 0.1 per cent).

“The decrease in production capacity was primarily influenced by low demand, insufficient supply of materials and the repair & maintenance of machinery & equipment,” Mohd Uzir said.

Five sub-sectors posted a capacity utilisation rate above 80 per cent in the 4Q23 with the highest rate of 83.2 per cent recorded by the manufacture of non-metallic mineral products, basic metals and fabricated metal products subsector, with a y-o-y increase of 4.5 percentage points.

This was followed by transport equipment and other manufactures with 82.2 per cent.

Meanwhile, the manufacture of petroleum, chemical, rubber and plastics sub-sector operated at the lowest capacity with 77.9 per cent, reducing by 4.2 percentage points.

In comparison with the preceding quarter, all subsectors posted an increase except for the electrical and electronic products, which declined by 0.7 percentage points to 79.2 per cent.

As for the capacity utilisation in export-oriented industries, Mohd Uzir pointed out that it continued to decline for four consecutive quarters, dropping by 2.1 percentage points y-o-y to 8.4 per cent in this quarter.

“The manufacture of coke and refined petroleum products recorded a substantial deterioration of 9.6 percentage points, reaching 76.1 per cent, followed by the manufacture of textiles, which shrank by 7.7 percentage points to 76.9 per cent,” he said.

In comparison with the previous quarter, the capacity utilisation rate in exportoriented industries increased slightly by 0.02 percentage points.

Mohd Uzir said the capacity utilisation rate of domesticoriented industries remained vibrant, registering 82.8 per cent in 4Q23 (+3.3 percentage points) with all industries in this segment posting an upward trend except for the manufacture of leather and related products which decreased by 10.9 percentage points to 81.9 per cent.

At the state level, Mohd Uzir said that in 4Q23, the manufacturing industry in six states operated at a capacity exceeding the national rate, namely Labuan (95.6 per cent), Negeri Sembilan (83.8 per cent), Pahang (83.7 per cent), Selangor (82.1 per cent), Melaka (81.9 per cent) and Johor (81.8 per cent).

Six states experienced a y-o-y decrease in capacity utilisation, namely Kedah, Kelantan, Melaka, Perlis, Terengganu and Sarawak.

Perlis continued to record the lowest capacity utilisation rate at 72.3 per cent, he said.

The manufacturing industry’s overall performance in 2023 operated at a lower capacity rate of 79.3 per cent, which fell by 1.1 percentage points as against 2022’s 80.4 per cent.

“Almost all sub-sectors posted a decline except for the non-metallic mineral products, basic metal and fabricated metal products (+1.5 percentage points at 80.7 per cent) and transport equipment and other manufactures (+0.5 percentage points; 82.1 per cent).

Export-oriented industries decreased by 2.1 percentage points to 78.3 per cent in 2023 (2022: 80.4 per cent).

Domestic-oriented industries posted 81.4 per cent, improving by 1.1 percentage points (2022: 80.3 per cent).