Penang’s Manufacturing Sector Grows, Despite Some Headwinds

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Production growth may have slowed, but manufacturers are cautiously optimistic.

Penang’s manufacturing sector has been the backbone of job creation and income generation in Malaysia since the 1970s. Its activities have evolved from low-end, labour-intensive assembly operations to export-oriented, capital-intensive industries, and it is now advancing into knowledge intensive activities – such as procurement, technological development and research and development.

In 2016 some restructuring in activities were seen in Penang’s manufacturing landscape, but it is still too early to measure their impact. The labour market in the state remains tight – with labour demand exceeding supply – and the effects this will have in 2017 are worth looking into.


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