Domestic manufacturing industry set for expansion
21 Oct 2024
The domestic manufacturing sector is expected to cement firmer footing across industries amid stable global economic growth.
According to the Economic Outlook report, the manufacturing sector is expected to strengthen by 4.5% in 2025, driven by significant policies such as the New Industrial Master Plan (NIMP 2030) and the National Semiconductor Strategy (NSS).
The report said domestic-and exportoriented industries continue to uphold the sector’s performance in line with resilient domestic demand and favourable external environment.
On the domestic front, production in household and consumer goods-related industries such as food, beverages, and textiles is expected to be sustained.
This aligns with supportive policy measures such as salary adjustments for civil servants and the withdrawal of the EPF Flexible Account, which will stimulate consumer spending.
The report said favourable tourist arrivals in conjunction with major international events will also spur the demand for consumer goods.
On the other hand, increasing approved and realised investments signifies a positive outlook for construction activities, thereby propelling growth in manufacturing construction-related materials.
Export-oriented industries are also expected to continue their growth trajectory, which aligns with the higher global demand for electronics components.
The electrical, electronic, and optical products subsector is expected to accelerate further, mainly underpinned by sustained demand for intermediate products, including advanced chips used in next-generation smartphones and other consumer devices.
Furthermore, the rising realisation of approved investment in the semiconductor industry, coupled with concerted efforts by the government to elevate the entire high-tech ecosystem under the NSS, will provide additional support to the subsector’s growth.
The report said the mining sector will likely face a subdued outlook for 2025.
It also noted that the mining sector is forecast to contract by 1% in 2025, following a sluggish performance in key subsectors.
The natural gas subsector is projected to decline as output decreases, mainly due to the planned shutdown of two facilities in Sarawak for maintenance purposes and moderating demand from major importing countries such as Japan, China and South Korea.
The overall natural gas production is expected to remain below the 2024 capacity despite several new plants being scheduled to commence operations.
Source: The Star
