IPI growth slows in May

PETALING JAYA: Malaysia’s Industrial Production Index (IPI) saw a year-on-year growth of 3% in May 2018, lower than the 4.6% expansion in April.

According to the Department of Statistics, the growth in May 2018 was supported by the increase in manufacturing (4.1%) and electricity (2.6%), while mining contracted 0.5%.

The manufacturing sector output was driven by electrical and electronic equipment products (4.8%); petroleum, chemical, rubber and plastic products (3.7%); and non-metallic mineral products, basic metals and fabricated metal products (5%).

The decline in the mining sector was due to the 4.8% decrease in the natural gas index, while the crude oil index gained 4.7%.

MIDF Research expects the IPI to expand at a steady pace for the second half of 2018 amid escalating trade tension, moderating inflation and supportive policy changes for businesses such as tax-holiday and stable retail fuel prices.