Malaysia’s first quarter GDP grew by 5.0% to hit RM360.2 billion (Q4/2021:3.6%). This was mainly supported by robust growth in the services sector and higher household consumption due to an improvement in consumer confidence. The strong recovery in the labour market and continued expansion on the external front has also contributed to economic growth. Furthermore, a relaxation of restrictions and the reopening of borders in April 2022 further benefited overall economic conditions. Similarly, the Manufacturing Industrial Production Index (IPI) grew by 6.3% in Q1/2022. The index has remained relatively consistent since its recovery from the -18% drop YoY registered in Q2/2020 due to the nationwide lockdown in March 2020.

However, a marginal -0.7% drop in IPI in Q3/2021 was due to the reimplementation of the nationwide lockdown in June 2021. The main subsectors which contributed to growth of the manufacturing sector in the quarter included Electrical & Electronics Products, Non-metallic Mineral Products, Basic Metals & Fabricated Metal Products and Food, Beverages & Tobacco Products. The demand for manufactured goods and the re-opening of more businesses have improved the demand outlook for the nation’s manufacturers even if the IPI slipped in some areas.