Malaysia: Industrial production slows in February
Latest reading: Industrial production increased 3.1% on a year-on-year basis in February, following a 5.9% rise in the prior month. February’s reading was the weakest since June 2025.
Relative to the previous month’s data, readings in February softened for manufacturing (+4.2% on a year-on-year basis vs +7.3% in January), mining and quarrying (-2.0% vs +0.1% in January) and electricity and gas (+4.6% vs +6.2% in January).
In seasonally adjusted month-on-month terms, industrial production fell 2.9% in February, following 0.9% growth in the prior month.
Panelist insight: Commenting on the outlook, EIU analysts said:
“Manufacturing (23% of GVA) is likely to be among the fastest-growing broad economic sectors over 2026-30, expanding at an annual average rate of around 4.6%. It will remain outward-facing, with more than 80% of its activity accounted for by export-oriented manufacturing. Strong inflows of FDI will underpin this growth, largely connected to the semiconductor and advanced electronics industry. Global demand for these products is being buoyed by a chip upcycle driven by developments in AI. Malaysia will continue to benefit, given its existing foothold in the industry and its favorable relations with both the West and China, amid trade tensions in key technologies.”