Malaysia: January IPI expands 3.2%, faster than expected

PETALING JAYA: Malaysia’s industrial production index (IPI) rose 3.2% in January, exceeding a Bloomberg survey of 2.3%, underpinned by the increase in the electricity and manufacturing indices.

The electricity sector index advanced 7.8% on-year, the highest since July 2017, while factory output grew 4.1% on-year, moderating from 4.4% in the previous month.

MIDF Research said the IPI performance was in tandem with the modest pace of Malaysia’s external trade in January.

Malaysia’s total exports rose 3.1% year-on-year, with re-exports and domestic exports at 0.4% and 3.9% on-year, respectively.

The Statistics Department’s chief statistician Datuk Seri Dr Mohd Uzir Mahidin said the growth in January 2019 was supported by the increase in the electricity index (7.8%) and manufacturing index (4.2%). However, the mining index fell 0.9%.

The manufacturing sector output increased by 4.2% in January, slightly slower than the 4.4% expansion in December 2018.

The major sub-sectors which recorded an increase in January 2019 were non-metallic mineral products, basic metal and fabricated metal products (4.3%), petroleum, chemicals, rubber and plastic products (4%), and electrical and electronic equipment products (3.9%).

The electricity sector index increased by 7.8% from a year ago.

However, the weaker mining sector, whose index declined by 0.9% in January on-year, was due to a decrease in the crude oil index (-2.2%). The natural gas index increased by 0.3% on-year.

“As guided by the recent Business Tendency Survey data, we believe the IPI growth will be growing between 3% and 4% during the first half of 2019.” MIDF Research forecasts an IPI growth of 2.9% for 2019.