FACTORY OUTPUT RISES BY 4PC
Surprise figures led by manufacturing sector point to improved economic outlook for second quarter
MALAYSIA’S industrial output rose by a surprising four per cent year-on-year in June, led by manufacturing activities — pointing to improved economic outlook for the second quarter.
Research houses are now expecting the second quarter (April to June) to record a more than five per cent growth.
UOB Bank economist Julia Goh expects gross domestic product (GDP) growth to hit 5.5 per cent in the second quarter.
This was based on the manufacturing output, which grew 6.2 per cent, services activity (seven per cent), crude palm oil output (12.3 per cent) and construction work (11.2 per cent).
“Given a robust domestic demand and external trade, Bank Negara (Malaysia) is likely to revise upwards this year’s growth outlook when the secondquarter results are released next Friday,” said Goh.
Bank Negara’s current GDP projection is 4.3 to 4.8 per cent.
The Statistics Department said the manufacturing sector recorded a 4.7 per cent growth in activities, with most of the output coming from electrical and electronics (E&E) at 8.3 per cent, food, beverages and tobacco (6.7 per cent); and petroleum, chemical, rubber and plastic products (2.8 per cent).
In June, the mining sector output rose 2.4 per cent following a 0.7 per cent increase in crude oil and 4.4 per cent in natural gas.
Electricity output increased by 2.1 per cent in June after an increase of 2.5 per cent in May.
Meanwhile, the manufacturing sector recorded an 11.5 per cent growth in sales, rising to RM62.3 billion, compared with RM55.8 billion a year ago.
Year-on-year, the significant increase in sales value was due to the increase in E&E (15.4 per cent) petroleum, chemical, rubber and plastic products (15.3 per cent) and non-metallic mineral products, basic metal and fabricated metal products (5.7 per cent).
Alliance Bank said the secondquarter growth could have been robust at around 5.2 per cent with the manufacturing sector momentum, along with a robust manufacturing exports performance.
But it said while industrial production remained stable with the three-month moving average hovering above the four per cent expansion level, activities were likely to moderate in the second half of the year.
“The manufacturing sector momentum will likely slow down, given the contractionary Purchasing Managers’ Index and global uncertainties.”