IPI Hits 18-Month High Driven By Manufacturing Strength

Malaysia’s IPI surged 5.9% in January, led by manufacturing and semiconductors, with Apex Research maintaining cautious growth forecasts

Malaysia’s Industrial Production Index (IPI) rose 5.9% year-on-year in January, its fastest pace in 18 months, surpassing market expectations of 5.0%. Apex Research noted the stronger print was driven by robust manufacturing output (+7.3%) and a rebound in mining, while electricity production also strengthened.

Malaysia’s IPI

Export-oriented manufacturing remained the bright spot, supported by electronics and semiconductors, with “computer, electronics & optical products” rising 13.6%. The domestic-oriented cluster also accelerated to 5.4%, underpinned by food processing and motor vehicles. Apex Research highlighted that the AI-driven semiconductor upcycle continues to anchor Malaysia’s export sector, while resilient domestic consumption supports local industries.

External risks remain, particularly uncertainty over U.S. tariff policy and the ongoing U.S.-Iran conflict, which could disrupt supply chains and weigh on global demand. Nonetheless, Apex Research expects Malaysia’s economy to remain resilient, maintaining its 2026 manufacturing growth forecast at 4.5% and GDP growth at 4.7%.

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