Malaysia’s garment industrys

Malaysia’s Garment Industry

Malaysia’s textile and apparel sector stands as a crucial component of its economy. In 2023, it generated about RM5.3 billion (approx. US $1.16 billion) in GDP and saw a year-on-year sales growth of around 3.1 percent in apparel manufacturing by 2024 . The broader apparel market—including domestic and export-facing sales—is projected to hit US $5.9 billion by 2025, with women’s wear dominating roughly US $2.6 billion of that .

Scale & Employment
The industry employs over 70,000 workers across nearly 1,000 factories (with 400 focused on ready-made garments), including spinning, weaving, and printing operations . These factories collectively make Malaysia the eleventh-largest apparel exporter, shipping around US $3.2 billion worth of garments in 2021 .

Export Orientation & Key Markets
Approximately 85 percent of garment production in Malaysia is export-bound, underscoring the sector’s global orientation . The United States remains the primary destination—accounting for nearly 12 percent of textile and attire exports—with other leading markets including Turkey (10.9 percent), Japan (9.8 percent), China (7.6 percent), and Indonesia (7.4 percent) . Bilateral trade with Singapore is also significant: in early 2023, Malaysia exported around US $124 million in garments to Singapore, making it the country’s second-largest export market in this region .

Domestic Supply Chain & Trade Imbalance
Malaysia’s garment value chain covers contractions from spinning and weaving to finishing and apparel production. Yet, upstream segments like spinning/weaving are less developed, causing the country to rely on imports for raw materials—such as yarns and fabrics—despite strong downstream capability .

Competitive Landscape & Challenges
In recent years, Malaysian garment exports have remained flat or even declined, largely due to intensifying competition from lower-cost Southeast Asian neighbors like Vietnam, Indonesia, Bangladesh, and Cambodia . In early 2024, export values hovered near those recorded over a decade earlier . Other challenges include rising labor costs, currency volatility, and the increasing cost of imported materials.

Strategies & Government Support
The Malaysian government is actively promoting industry transformation through initiatives such as the New Industrial Master Plan (NIMP) 2030 and Fourth Industrial Master Plan (IMP 4.0), aiming to boost automation, supply chain integration, and value-added manufacturing . Incentives from key agencies—MITI, MATRADE, MIDA—support investments in technical textiles, sustainable production, halal-credentialed apparel, modest fashion, and OEM/ODM services .

Emerging Trends & Growth Opportunities
Malaysia is positioning itself as a hub for specialized segments:

Technical and functional textiles: including medical textiles and industrial fabrics, benefiting from advanced material investments .

Modest fashion and halal-certified apparel: expanding exports to the Middle East, Europe, and Southeast Asian Muslim-majority markets .

Sustainability and lean manufacturing: the industry increasingly emphasizes GOTS-certified cotton, recycled fibers, eco-dyeing methods, and small-batch agility in response to global brand preferences .

Furthermore, Malaysia is benefiting from geopolitical supply chain reshuffling—particularly in the “China-plus-one” model. Multinationals are diversifying operations into ASEAN, including Malaysia, to mitigate risk and leverage trade diversification . The country’s robust trade infrastructure, numerous FTAs, and SEZs (e.g., in Johor) further reinforce this strategic shift .

Outlook
Looking ahead, the Malaysian garment sector is poised to grow modestly (projected CAGR ~5.3% through 2029) . Its future depends on several key actions:

1. Enhancing upstream textile production to reduce import dependency.

2. Scaling automation and digital manufacturing for cost-effective, high-quality outputs.

3. Deepening niche specializations—like halal, functional, and sustainable textiles.

4. Leveraging trade diversification and competitive positioning in the ASEAN region.

Conclusion
Malaysia’s garment industry is evolving from traditional mass production toward a more sophisticated, technology-driven, and value-focused sector. With proactive government strategies, growing specialization, and supply chain realignment, the industry stands to regain momentum—though success hinges on overcoming structural and cost challenges.