February IPI Lifted by Manufacturing and Electricity Output

Tuesday April 12, 2011


PETALING JAYA: Lifted by increases in manufacturing and electricity output, Malaysia's industrial production index (IPI) expanded 5% in February from a year ago after gaining a revised 0.5% year on year (yoy) in the preceding month.

According to the Department of Statistics, manufacturing output rose 7.9% yoy, while electricity output rose by a marginal 0.7% yoy in February.

The increase in manufacturing output was attributable to increases in the following groups - petroleum, chemical, rubber and plastic products (17.1% yoy); non-metallic mineral products, basic metal and fabricated metal products (26.3% yoy); and food, beverages and tobacco products (10.1% yoy).

The mining sector, however, remained depressed, with a decline of 0.7% yoy due to decreases in crude oil index (-4.7% yoy).

The improvement in February's industrial production was in tandem with higher external demand, the department said.

Data released last week showed Malaysia's exports grew above market expectation at 10.7% yoy due to strong rebound in shipment of electronics and electrical products. Strong commodity prices were also providing a buffer for exports of the resource-rich country.

In a separate report, the Department of Statistics announced that manufacturing sales in February rose 10.9% from a year earlier, after a revised 7.6% gain in the preceding month.

Economists expected the IPI in the months ahead to decelerate, as global growth continues to moderate.

The situation will also be exacerbated due to short-term supply chain disruptions resulting from the earthquake and tsunami that hit Japan last month.

“A dent in output is expected in the automotive and electronics sectors.

“Although both sectors have sufficient stock at the moment, inventories will run out in May due to the shortage of components and parts,” CIMB Research said in a report.

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