Source: MoF

KUALA LUMPUR, Oct 11 -- The manufacturing sector is expected to grow 4.1 per cent by 2020, driven by steady improvement in the export-oriented industries coupled with sustained expansion in the domestic-oriented industries.

According to the Economic Outlook 2020 report released today by the Ministry of Finance, the sector, however, continues to face various challenges and issues including premature de-industrialisation, low adoption of technology and local content development as well as a skills deficit.

In this regard, the report said various measures can be undertaken such as streamlining incentives under a one-stop incentive centre; re-engineering training and skills, venturing into new focus areas and developing an integrated manufacturing hub.

These initiatives are expected to sustain the future growth of the manufacturing sector especially with the new focus areas, namely artificial intelligence (AI), Big Data Analytics (BDA) and Internet of Things (IoT), it said.

The report said the manufacturing sector grew by 4.2 per cent in the first half of 2019, mainly supported by the domestic-oriented industry.

It said the export-oriented industry was growing at a slower pace due to modest expansion in the electrical and electronics (E&E) sub-sector in line with softer global demand for electronics products.

It said the E&E sub-sector, which accounts for 40.8 per cent of export-oriented industries, is expected to expand moderately by 3.6 per cent this year due to a downturn in the semiconductor cycle and the escalating trade war between the US and China.

"This year, the manufacturing sector is expected to grow 4.0 per cent with the manufacturing production index and sales expanding 4.1 per cent and 6.1 per cent respectively between January to July," it said.

-- BERNAMA