Positive manufacturing momentum likely to continue

KUALA LUMPUR: Positive manufacturing momentum, in terms of production and sales, is expected to continue, said AmResearch.

This is due to imports having grown at a healthy pace of up 15.4 per cent year-on-year (y-o-y) in November last year.

Therefore, the firm reaffirmed its gross domestic product growth outlook for last year and this year at 5.9 and 5.5 per cent, respectively.

AmResearch noted that imports had increased in November, due largely to increase in capital imports (up 12.2 per cent y-o-y) and intermediate goods (up 13.8 per cent y-o-y).

It expects a stronger US dollar/ringgit outlook this year with its end-period projection at 3.95 and full-year average at 4.004.02 (base case).

It added that the best case for the end-period would be 3.76 with full-year average at the 3.803.82 levels.

Malaysia’s Industrial Production Index (IPI) grew five per cent y-o-y in November last year, underpinned by stronger growth indices, primarily in manufacturing, mining and electricity.

The Department of Statistics on Thursday said the output for the manufacturing index had increased 6.7 per cent, while both mining and electricity were up by 0.2 and 3.9 per cent, respectively.

AmResearch said stronger manufacturing output was driven by manufacturing sales, which continued to grow at double digits for the 12th consecutive month, up 10.9 per cent y-o-y. “We believe growth is being supported by the continued strong global demand for electronics, intra-regional trade flows and resource-based products.”

Public Investment Bank Bhd (PublicInvest), meanwhile, expects last year’s IPI to reach 4.7 per cent, following better-thanexpected IPI for November last year. The projection for last year will be the highest since 2014.

PublicInvest expects IPI for this year to reach 5.2 per cent.

“We foresee some upside risks to 2018 projection should major economies produce strongerthan-expected growth.

“Of note, the United States, eurozone and China registered strong Purchasing Manager’s Index last month, which is the year’s peak and their best in the last few years,” it added. Ayisy Yusof