According to the Department of Statistics Malaysia latest industrial report, the industrial production maintained its strong growth momentum in June 2026, with the Industrial Production Index (IPI) expanding 6.5% year-on-year, driven primarily by continued strength in the manufacturing sector.
The June growth accelerated from the 3.4% increase recorded in May, while on a month-on-month basis, the IPI rose 5.5%, compared with a 1.4% increase in the previous month.
The Manufacturing sector remained the main driver of industrial output, expanding 7.3% year-on-year in June, up from 6.6% in May.
Electricity generation also strengthened, rising 6.7%, compared with 4.8% previously.
Meanwhile, Mining output grew 3.1%, although this represented a sharp moderation from the 19.8% growth recorded in May.
Export-oriented industries remained a key pillar of manufacturing growth, expanding 7.6% year-on-year in June.
The growth was led by the manufacture of computer, electronics and optical products, which maintained double-digit growth of 14.9%.
The manufacture of coke and refined petroleum products also recorded positive growth of 2.9%.
On a month-on-month basis, export-oriented industries surged 10.7% in June, accelerating from the 5.7% growth recorded in May.
DOSM said the performance of export-oriented industries was in line with the growth recorded in Malaysia’s exports of manufactured goods during the month.
Domestic-oriented industries also recorded stronger growth, expanding 6.4% year-on-year in June compared with just 2.0% in May.
The expansion was supported by the manufacture of motor vehicles, trailers and semi-trailers, which grew 12.6%, while the manufacture of basic metals increased 8.2%.
On a month-on-month basis, domestic-oriented industries grew 1.2%, reversing a 4.6% contraction in May.
The Mining sector recorded more moderate growth of 3.1% in June, largely due to a slowdown in natural gas production.
Natural gas output increased 7.4%, compared with a much stronger 37.4% expansion in May.
At the same time, crude oil and condensate production declined further by 3.3%, compared with a 0.7% contraction in May.
On a month-on-month basis, the Mining index fell 0.3%, following a 2.2% decline in May.
Electricity generation increased 6.7% year-on-year in June, accelerating from 4.8% in May. However, the Electricity index declined 2.9% month-on-month, compared with a 1.8% increase in May.
Malaysia’s industrial output performance remained relatively strong compared with several major economies in June.
Singapore’s IPI grew 7.2%, while the United States recorded a 1.1% increase. Thailand, meanwhile, recorded a 3.1% contraction.
In contrast, China’s industrial output rose 5.3%, South Korea grew 5.8%, Japan increased 4.2%, while Taiwan posted a sharp 23% expansion. Vietnam also recorded strong growth of 11.1%.
For the second quarter of 2026, Malaysia’s IPI expanded 7.7% year-on-year, accelerating significantly from the 4% growth recorded in the first quarter.
The quarterly expansion was supported by Mining, which grew 9.4%, followed by Manufacturing at 7.4% and Electricity at 7.3%.
On a quarter-on-quarter basis, the IPI increased 1.9% in the second quarter.
For the first half of 2026, industrial production expanded 5.9%, significantly stronger than the 2% growth recorded in the corresponding period of 2025.
Manufacturing remained the largest contributor, growing 6.5%, while Electricity increased 6.3% and Mining expanded 2.9%.
