Malaysia’s manufacturing industry recorded a capacity utilisation rate of 83.7% in the second quarter of 2026 (2Q2026), up 1.2 percentage points from 82.5% a year earlier, according to the Department of Statistics Malaysia (DOSM).
The latest capacity utilisation data indicated continued improvement in the utilisation of manufacturing facilities, with the rate also rising 0.9 percentage point from 82.8% in 1Q2026.
All manufacturing sub-sectors recorded capacity utilisation rates above 80% during the quarter.
The Transport Equipment and Other Manufactures sub-sector recorded the highest utilisation rate at 87.2%, up 1.2 percentage points year-on-year.
This was followed by the Electrical and Electronics (E&E) Products sub-sector at 85.3%, an increase of 2.6 percentage points from the corresponding quarter last year.
Capacity utilisation improved across all three months of the quarter, with April recording 82.9%, May at 83.5% and June at 84.5%.
The respective year-on-year increases were 1.8 percentage points in April, 0.6 percentage point in May and 0.9 percentage point in June.
DOSM said capacity utilisation among export-oriented industries increased 1.3 percentage points year-on-year to 82.9% in 2Q2026, compared with 81.6% in the same quarter last year.
The strongest improvement was recorded in the manufacture of computer, electronics and optical products, where capacity utilisation rose 3.5 percentage points to 84.9%.
The manufacture of plastic products also recorded an increase of 0.6 percentage point to 81.5%.
However, several export-oriented industries continued to operate below the 80% utilisation threshold.
These included the manufacture of wood and wood products, excluding furniture, and articles of straw and plaiting materials at 75.3%; textiles at 79.9%; and vegetable and animal oils and fats at 79.8%.
Compared with 1Q2026, capacity utilisation among export-oriented industries increased 0.9 percentage point from 82%.
Capacity utilisation among domestic-oriented industries rose 0.8 percentage point year-on-year to 85.2% in 2Q2026.
Most industries within this segment recorded relatively high utilisation rates, led by the manufacture of motor vehicles, trailers and semi-trailers, which reached 90.9%, up 2.7 percentage points from a year earlier.
The manufacture of basic metals followed at 81.4%, an increase of 0.5 percentage point.
At the lower end, the manufacture of paper and paper products recorded a capacity utilisation rate of 77.1%.
On a quarterly basis, domestic-oriented industries’ capacity utilisation improved 0.7 percentage point from 84.5% in 1Q2026.
Capacity utilisation exceeded the national rate in nine states and the Federal Territory of Labuan during the quarter.
Labuan recorded the highest capacity utilisation rate at 96.2%, followed by Melaka at 89.1% and Selangor at 86.9%.
Other states recording rates above the national level were Pahang at 85.6%, Terengganu at 85.5%, Johor at 85.1%, Kedah at 85.0%, Negeri Sembilan at 84.6% and Sabah at 84.1%.
Perlis recorded the lowest capacity utilisation rate at 57.8%.
Despite the improvement in overall utilisation, DOSM said manufacturers continued to face several factors limiting their ability to utilise available production capacity.
Low demand remained one of the main causes of under-utilisation, alongside insufficient supply of materials and the repair and maintenance of machinery and equipment.
The latest figures point to relatively healthy utilisation across Malaysia’s manufacturing base, particularly in E&E, transport equipment and automotive-related industries, while persistent constraints in demand and supply remain key areas to watch for manufacturers in the months ahead.
