KUALA LUMPUR (Aug 9): Malaysia’s industrial production index (IPI) rose 12.1% year-on-year (y-o-y) in June 2022, supported by growth across all three components of the IPI, according to the Department of Statistics Malaysia (DOSM).
In a statement on Tuesday (Aug 9), the DOSM said the manufacturing output component rose 14.5%, the electricity sector increased 14.1% while the mining segment grew 2.1%.
In monthly terms, the DOSM said Malaysia's IPI grew 9.6% in June 2022 from May 2022.
Compared to a year earlier, the IPI rose 12.1% in June 2022 versus the 4.1% y-o-y growth in May 2022, according to the department.
The IPI's 12.1% y-o-y rise in June 2022 is significantly above a consensus forecast for a y-o-y growth of 4.9% based on a Reuters’ survey among 12 economists.
Meanwhile, RHB Research in its note on Tuesday said June’s IPI came above its expectation but highlighted that the upward momentum in IPI growth could taper towards year end, given the brewing headwinds arising from uncertainties in the global landscape.
It forecast full-year IPI growth of 5.4% y-o-y for 2022.
The research house said while there is continued expansion in the S&P Global Malaysia manufacturing purchasing managers index, 50.6 points in July from 50.4 points in June, thereby signalling a stable manufacturing sector performance going forward, the manufacturing sector outlook could be clouded by the impact of rising cost pressures and uncertainties in the global landscape.
“The inflationary pressures have built up amid material shortage and elevated commodity prices.
“The producer price index (PPI), which measures the costs of goods at the factory gate, stayed elevated at double-digits growth, albeit at a slower momentum,” it said.
RHB Research said its proprietary database indicated that manufacturing activities might begin to show signs of slowdown in the upcoming months.
For gross domestic product (GDP) in the second quarter of this year (2Q2022), RHB Research has maintained its projection at 6.1% in view of the robust economic indicators released for the quarter.
Bank Negara Malaysia is set to announce the 2Q2022 GDP data on Aug 12.