Malaysia posts strong March factory sales as electronics demand powers output
The electrial and electronics segment saw a 13.3% annual rise in sales.
Malaysia's manufacturing sector recorded sales of RM173.1b in March 2026, lifting the year-on-year growth rate to 5.3% and underscoring the country's standing as one of South-East Asia's most durable industrial economies.
The electrical and electronics sub-sector drove the expansion, posting a 13.3% annual rise in sales — a figure that reflects sustained global demand for semiconductors and advanced consumer electronics manufactured across Penang, the Klang Valley and Johor.
The food, beverages and tobacco sub-sector contributed further momentum, rising 7.8%, whilst non-metallic mineral products, basic metals and fabricated metal products added 3.7%.
Month on month, the sector's performance was even more striking. Sales surged 8.7% from the RM159.2b recorded in February 2026, the sharpest monthly jump of the year to date.
Export-oriented industries, which account for 71.7% of total manufacturing sales, expanded 6.5% year on year in March, and surged 10.7% compared with the preceding month. Vegetable and animal oils and fats manufacturing advanced 10.2%, whilst machinery and equipment output grew 2.7%.
Domestically oriented industries posted a 2.5% annual rise, supported by food processing at 5.0% and basic metals and other non-metallic mineral products at 3.2%.
On the labour front, the sector employed 2.4 million workers in March, up 1.1% year on year, with the food, beverages and tobacco segment recording the fastest workforce growth at 2.1%, followed by electrical and electronics.
Salaries and wages paid across the sector rose 2.2% annually to RM8.56b, though they dipped 0.2% from February. The average wage per employee stood at RM3,547, a 1.1% annual increase, whilst sales value per employee climbed 4.2% to RM71,705.
The first-quarter picture reinforces the sector's steadiness. Manufacturing recorded cumulative sales of RM501.5b in the January-to-March period, a 5.5% rise — slightly below the 5.8% logged in the fourth quarter of 2025. The workforce expanded 1.1% to 2.4 million, salaries and wages grew 2.3% to RM25.9b, and sales per employee rose 4.4% to RM207,779.
Analysts, however, flag clouds on the horizon. Around 72% of manufacturers have reported deteriorating business conditions since April, citing elevated freight and logistics costs tied to the Middle East crisis, which has disrupted supply chains, order books and investment decisions. Nevertheless, Kenanga Research raised its full-year 2026 manufacturing output growth forecast to 4.3% from 3.5%, after stronger-than-expected first-quarter performance, with stockpiling activity partly bolstering demand ahead of potential supply disruptions in the second half of the year.
