May IPI up 3% on higher manufacturing sector output

KUALA LUMPUR: Manufacturing underpinned the country’s industrial production index (IPI) growth, which expanded 3% in May from a year ago and in line with a Bloomberg survey.

Chief statistician Datuk Seri Mohd Uzir Mahidin said year-on-year, the growth of IPI was supported by the increase in manufacturing by 4.1% and electricity by 2.6%.

However, mining posted a decrease of 0.5% from the 1.8% in April 2018.

“The manufacturing sector output rose by 4.1% in May 2018 after recording a growth of 5.3% in April 2018,” he said in a statement yesterday.

Mohd Uzir said the major sub-sectors which registered increases in May 2018 were the electrical and electronic equipment products (4.8%) and petroleum, chemical, rubber and plastic products (3.7%).

Non-metallic mineral products, basic metals and fabricated metal products (5.0%).

The report also stated that the electricity output increased by 2.6% in May 2018 after recording an increase of 5.8% in April 2018.

RHB Research in a report said that May’s ebbing IPI number was likely attributed to fewer working days during the month as a result of the 14th general elections (GE14) and the two days post-election holidays.

It said the numbers were also an indication that trade volumes have started to lose steam amid a slowdown in global economic activity and growing concerns over the US-China trade war.

Overall, the research house said it estimated 2Q18 GDP growth of 5.3% year-on-year, slowing slightly from the 5.4% registered in 1Q18.

“We maintain Malaysia’s 2018 GDP growth forecast at 5.2%, easing from 5.9% in 2017, on a slowdown in external trade but cushioned by resilient domestic demand.”