Factory output 4.6% higher in May

PETALING JAYA: Factory output jumped 4.6% in May 2017 from a year ago, boosted by strong demand for electrical and electronic (E&E) goods mainly destined for the export market.

The manufacturing and electricity index expanded 7.3% and 2.5% each, the Statistics Department said.

Alliance DBS Research noted that the strong performance, as measured by the industrial production index (IPI), suggested that exports growth would continue to be sus- tainable in the near term.

“We reckon that the strong exports growth trend, as seen in recent months, could lead to a spillover effect to export-oriented industries, such as the manufacturing sector,” it said.

The firm said the IPI three-month moving average rose faster by 4.4% in May against a 4.3% growth in April.

It said E&E production continued to drive IPI growth, with a year-todate increase of 9.1% until May 2017, compared to a 6.8% increase during the same period a year ago.

However, it also noted that the crude oil production subsector continued its decline for the fifth consecutive month, in line with Malaysia’s commitment towards the oil production cut agreement by the Organisation of the Petroleum Exporting Countries (Opec).

“In the near term, mining sector production would likely remain weak, as Opec member countries remain committed to the crude oil production cut agreement, at least till the end of the first quarter of 2018,” it said.

Moving forward, the research house reiterated its positive outlook on the manufacturing sector, given that the three-month moving average was 6.6% in May against 6.3% in April 2017.

The major sub-sectors which expanded in May were E&E products, which grew 11.6%; food, beverages and tobacco, by 12.9%; and petroleum, chemical, rubber and plastic products by 3.1%.

Output from the electricity sector rose by 2.5% after a decrease of 1.5% in April 2017.

The mining index saw a decline of 2.3% after declining 2% in April 2017, due to the decrease of 5.4% in the crude oil index. The natural gas index, meanwhile, rose 1.5%.