Au­gust IPI growth beats ex­pec­ta­tions

> In­dus­trial pro­duc­tion in­dex jumps 6.8% year on year, rid­ing on man­u­fac­tur­ing sec­tor’s per­for­mance

The Sun (Malaysia) - - SUNBIZ -

PE­TAL­ING JAYA: Malaysia’s in­dus­trial pro­duc­tion in­dex (IPI) rose by 6.8% in Au­gust 2017 from a year ago, beat­ing market ex­pec­ta­tions of 5.8%, un­der­pinned by strong growth in the man­u­fac­tur­ing sec­tor.

The Sta­tis­tics Depart­ment said in a state­ment yes­ter­day the in­crease is at­trib­uted to pos­i­tive growth in all indices, namely man­u­fac­tur­ing (7.6%), min­ing (5.3%) and elec­tric­ity (3%).

The man­u­fac­tur­ing sec­tor out­put was driven by strong growth in ma­jor sub­sec­tors – petroleum, chem­i­cal, rub­ber and plas­tic prod­ucts (6.9%); elec­tri­cal and elec­tron­ics prod­ucts (8.6%) and food, bev­er­ages and to­bacco prod­ucts (9.4%).

The min­ing sec­tor out­put grew 5.3% in Au­gust 2017 due to the in­crease in the nat­u­ral gas in­dex by 14.6%. How­ever, the crude oil in­dex de­clined by 1.6%.

The elec­tric­ity sec­tor’s out­put in­creased 3% in Au­gust 2017 on yearly ba­sis, it added.

Mean­while, the depart­ment said the man­u­fac­tur­ing sec­tor recorded RM65.1 bil­lion of sales in Au­gust 2017, an in­crease of 16.5% from the RM55.9 bil­lion a year ago.

The to­tal num­ber of em­ploy­ees in the man­u­fac­tur­ing sec­tor in Au­gust 2017 was 1.05 mil­lion, a growth of 2.6% or 26,391 per­sons as com­pared to 1.03 mil­lion in Au­gust 2016.

MIDF Re­search, in a sep­a­rate note, at­trib­uted the up­ward trend in over­all IPI per­for­mance to up­beat per­for­mance of ex­ter­nal trade ac­tiv­i­ties, which have seen ex­ports ex­pand­ing 21.5% year on year in Au­gust.

The re­search house said the growth trend was in line with the uptick man­u­fac­tur­ing Pur­chas­ing Man­agers’ In­dex (PMI) fig­ure in Au­gust which sur­passed the 50-point ex­pan­sion line.

“We opine con­tin­u­ous up­beat mo­men­tum in global de­mand re­mains as key driver in boost­ing up Malaysia’s in­dus­trial ac­tiv­i­ties.”

More­over, MIDF Re­search said it ex­pects the en­cour­ag­ing trend of IPI growth to con­tinue for the up­com­ing months given that ro­bust ex­ter­nal trade per­for­mance con­tin­ues and mod­est in­crease in com­mod­ity price will boost in­dus­trial ac­tiv­ity in Malaysia.

Due to strong ex­port per­for­mances for the past eight months of 2017 and op­ti­mistic busi­ness con­fi­dences, MIDF Re­search said it be­lieves the up­beat mo­men­tum will re­main, and thus cause pos­i­tive spillover ef­fects to the coun­try’s in­dus­trial pro­duc­tion this year.

“Hence, based on solid up­trend in trade ac­tiv­i­ties and steady do­mes­tic con­sump­tion, we ex­pect in­dus­trial pro­duc­tion growth to hit 5.3% in 2017,” it added.

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