The manufacturing sector in Malaysia covers the physical or chemical transformation of materials, substances, or components into new products, including the assembly of manufactured products. The output within the manufacturing sector may be finished in the sense that it is ready for utilization or consumption, or it may be semi-finished in the sense that it is to become an input for further manufacturing.
In 2017, the Gross Domestic Product at factor cost (“GDP”) of the manufacturing sector was valued at MYR270.0 billion (constant 2010 prices). The manufacturing sector contributed 23.3% to Malaysia’s GDP of MYR1,156.7 billion in 2017. Between 2010 and 2017, the GDP of the Malaysian manufacturing sector registered a 5.0% average year-on-year growth rate. Compared to the other primary sectors—services, construction, agriculture, mining and quarrying—the Malaysian manufacturing sector was among the top-three fastest growing sectors from 2010 to 2017.
The manufacturing sector in Malaysia is diverse in its production. Broadly, it can be categorized into the following subsectors.
- Food products, including oils and fats.
- Beverage and other consumable products, including tobacco products.
- Textile, clothing, and leather-related products.
- Furniture, wood, paper, and printing products.
- Refined petroleum, chemicals, rubber, and plastic products.
- Metallic products and non-metallic mineral products.
- Electronic, electrical, and optical products.
- Machinery, equipment, and other products, including transportation products.
In 2017, the manufacturing of refined petroleum, chemicals, rubber, and plastic products contributed 29.2% (or MYR78.8 billion) to the GDP of the Malaysian manufacturing sector, the largest among all subsectors, followed by the manufacturing of electronic, electrical, and optical products (27.9% or MYR75.2 billion)—both larger and out-valuing the total GDP of the Malaysian construction sector (MYR53.4 billion in 2017). In terms of growth rate, the metallic products and non-metallic mineral products subsector grew the fastest between 2010 and 2017 with an average year-on-year growth of 6.4%, although the electronic, electrical, and optical products subsector was just 0.7% slower at 5.7%. The electronic, electrical, and optical products subsector remains the most important among all manufacturing subsectors.
In 2017, there were an estimated 60,000 establishments within the Malaysian manufacturing sector, employing approximately 2.5 million people across all occupation levels. The mean and median salaries of employed persons within the Malaysian manufacturing sector in 2017 across all occupation levels were estimated to be about MYR2,200 and MYR1,700 per month respectively.
Growth of the manufacturing sector in Malaysia is on a slight increase in recent years. Between 2010 and 2017, the average year-on-year GDP growth rate of the Malaysian manufacturing sector increased from 5.0% (2010—2017) to 5.4% (2013—2017) and to 6.0% (2016—2017). Based on the historical growth trend of the Malaysian manufacturing sector between 2010 and 2017, the GDP of the Malaysian manufacturing sector is projected to grow by 5.8% to MYR285.5 billion in 2018.
Food products: Activities include the processing of the products of agriculture, forestry and fishing into food for humans or animals, and includes the production of various intermediate products that are not directly food products, such as vegetable and animal oils and fats.
Beverage products: Activities include the processing of beverages, such as non-alcoholic beverages and mineral water, manufacture of alcoholic beverages mainly through fermentation, beer and wine and the manufacture of distilled alcoholic beverages.
Tobacco products: Activities include the processing of product, tobacco, into a form suitable for final consumption.
Textile, clothing, and leather-related products: Activities include preparation and spinning of textile fibers as well as textile weaving, finishing of textiles and wearing apparel, manufacture of made-up textile articles; tailoring (ready-to-wear or made-to-measure), in all materials (e.g. leather, fabric, knitted and crocheted fabrics, etc.), of all items of clothing (e.g. outerwear, underwear for men, women or children; work, city or casual clothing, etc.) and accessories; dressing and dyeing of fur and the transformation of hides into leather by tanning or curing and fabricating the leather into products for final consumption.
Furniture, wood, and paper, and printing products: Activities include the manufacturing of furniture and related products of any material except stone, concrete and ceramic; wood products, such as lumber, plywood, veneers, wood containers, wood flooring, wood trusses, and prefabricated wood buildings; pulp, paper and converted paper products; printing of products, such as newspapers, books, periodicals, business forms, greeting cards, and other materials, and associated support activities, such as bookbinding, plate-making services, and data imaging.
Refined petroleum, chemicals, rubber, and plastic products: Activities include the transformation of crude petroleum and coal into usable products; organic and inorganic raw materials by a chemical process and the formation of products; the manufacturing of basic pharmaceutical products and pharmaceutical preparations; rubber and plastic products.
Metallic products and non-metallic mineral products: Activities include the manufacturing of glass and glass products (e.g. flat glass, hollow glass, fibres, technical glassware, etc.), ceramic products, tiles and baked clay products, and cement and plaster, from raw materials to finished articles; smelting and/or refining ferrous and nonferrous metals from ore, pig iron, or scrap; metal alloys and super-alloys; “pure” metal products such as parts, containers and structures.
Electronic, electrical, and optical products: Activities include the manufacturing of computers, computer peripherals, communications equipment, and similar electronic products, as well as the manufacture of components for such products; products that generate, distribute, and use electrical power, such as lighting, signaling equipment, and electric household appliances; consumer electronics, measuring, testing, navigating, and control equipment, irradiation, electromedical and electrotherapeutic equipment, optical instruments and equipment, and magnetic and optical media.
Machinery and equipment products: Activities include the manufacturing of machinery and equipment that act independently on materials either mechanically or thermally or perform operations on materials (such as handling, spraying, weighing or packing), including their mechanical components that produce and apply force, and any specially manufactured primary parts.
Transportation products: Activities include the manufacturing of motor vehicles for transporting passengers or freight, various parts and accessories, as well as trailers and semi-trailers.
Establishments: Establishments include individual proprietorships, partnerships, limited liability partnerships, private limited companies, public limited companies, co-operatives, and public corporations.
Occupation levels: Occupation levels include skilled (managers, professionals, technicians and associate professionals), semi-skilled (clerical support, plant and machine operators, etc.), and low-skilled (elementary occupations).