Industrial output surges 6.1pc in July

KUALA LUMPUR: Malaysia’s industrial output surged 6.1 per cent in July as all three major sub-sectors — manufacturing, mining and electricity — posted positive growth.

The Statistics Department said growth was led by manufacturing (eight per cent), electricity (7.9 per cent) and mining (0.2 per cent).

The manufacturing expansion was mainly due to higher growth in major sub-sectors, namely electrical and electronics (E&E) products (10.5 per cent); food, beverages and tobacco (19.2 per cent); and petroleum, chemical, rubber and plastic products (3.9 per cent).

The mining sector output rose due to an increase in natural gas although the index for crude oil fell during the month.

Industrial output remained relatively stable, said Alliance Bank, pointing to the three-month moving average hovering at 4.9 per cent in July against 4.3 per cent in June.

“However, on a seasonally adjusted basis, Industrial Production Index growth moderated to 1.3 per cent from June’s 1.9 per cent, suggesting potential weakness in the underlying trend,” it cautioned.

It said the E&E production growth fell in line with a fall in E&E exports month-on-month growth.

“Nevertheless, the manufacturing sector continues to be supported by the production of semiconductors, which expanded 62 per cent year-to-date till July.”

Alliance Bank also cautioned that although the latest Nikkei manufacturing Purchasing Managers’ Index data breached positive territory at 50.4, the sustainability still remains to be seen.

Although external demand still remains strong, it expects domestic demand to be the main growth driver this year.

Meanwhile, Malaysia’s manufacturing sales continued to record a strong growth of 22.2 per cent in July, rising to RM63.9 billion, compared with RM52.3 billion reported a year ago.

Year-on-year, the significant increase in sales value in July was due to the increase in E&E products (27.6 per cent), petroleum, chemical, rubber and plastic products (24 per cent) and non-metallic mineral products, basic metal and fabricated metal products (10.2 per cent). These three subsectors contributed 80.4 per cent to the sales value of the manufacturing sector. Rupa Damodaran