chapter 6 - Malaysia Productivity Corporation ( MPC)

PRODUCTIVITY PERFORMANCE OF THE MANUFACTURING SECTOR
Overview
The manufacturing sector recorded a productivity
growth of 2.0% in 2011 amounting to RM54,509
compared to 9.4% in 2010. The lower growth
experienced by the manufacturing sector was due
to massive reduction from external demand
as well as disruptions within the supply chain
which mainly affected export oriented industries
including the three NKEAs of the manufacturing
sector, particularly, the electronics and electrical
(E&E) sub-sector. However, relatively high growth
of domestic oriented industries (8.9%) due to
favourable domestic demand conditions had outweighed
the slower growth in the export oriented
industries (3.4%).
Total trade for major products in 2011 was RM694.5
billion, an improvement by 8.7% compared to
the previous year (RM638.9 billion). Export for
manufactured products in 2011 increased by 3.4%
to RM503.4 billion, representing 72.5% from total
export. Major export products were electrical and
electronic products, palm oil, LNG, chemicals and
chemical products (6.9%) and refined petroleum
products. Majority of these exports were from three
NKEAs of the manufacturing sector, namely, E&E,
refined petroleum products and palm oil industry.
E&E products continued to be Malaysia’s leading
export earner, valued at RM260.1 billion or
representing 37.5% of total export amongst the
major products in 2011. However, the E&E subsector
experienced a slight reduction of 4.1%
compared to the volume exported during 2010.
This was due to the weakness in external demand
and disruptions in the global E&E supply chain.
China continued to be the principal export market
for electronic products recording a share of 21.2%,
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followed by Singapore (15.5%), Hong Kong (11.8%)
and United States (12.7%). For electrical products,
the principle market comprised United States
(14.9%), European Union (13.7%), Japan (12.0%)
and Singapore (10.8%).
The oil and gas industry was the second largest
contributor to Malaysia’s export contributing
RM88.1 billion or 12.7% of the total export share
in 2011. The industry experienced significant
growth of 20.3% (RM88.1 billion) compared to the
previous year (2010: RM73.2 billion). Malaysia’s
main export market for crude oil were Australia
(29.8%), India (19.6%), Thailand (16.3%) and China
(7.5%), while for LNG, the export market were Japan
(62.0%), Korea (16.0%) and Taiwan (13.5%). Refined
petroleum products contributed RM36.7 billion,
representing 5.3% of the total manufacturing
export and experienced 25.5% growth in 2011.
Palm oil was the third largest contributor to export
income in 2011 amounting to RM60.4 billion with
an export share of 8.7%. The industry recorded a
substantial increase of 35.1% compared to the
previous year (2010: RM44.7 billion; 23.1%). Major
export markets were China (21.9%), European
Union (11.2%), Pakistan (10.0%) and Middle East
(9.6%).
Gross import in 2011 amounted to RM592.6 billion,
increased by 8.6% compared to the previous year
of RM545.7 billion. In tandem with the moderate
growth of the manufacturing sector, import for
intermediate goods was significantly lower which
recorded only 5.4% growth compared to previous
year (2010: 23%). Import of intermediate goods
such as parts and components of machineries
were severely affected by tsunami which hit Japan
during the first half of 2011. During the fourth