GROWTH in industrial production cooled a little in June after a scorching pace in April and May but was still strong enough to suggest that activity in factories was still robust.
The Statistics Department yesterday announced that the Industrial Production Index (IPI) grew by 8.6% in June from a year ago, with all its three sub-indices showing growth during the month. The IPI for April and May expanded by 11.8% and 16.2% respectively, after rising by 5% in March.
“The pace of growth for June was still very strong. The trend has moderated but it is not a sign of weakness,'' said an analyst at OSK Research.
Manufacturing activity in June grew by 8.7%, mining work expanded by 10% and electricity production rose by 5.2% from a year ago.
Compared with the preceding month, however, the IPI shrank by 8.1% , with the manufacturing index shrinking by 9.8%, electricity index by 2.6% and the mining index, 2.3%.
The IPI for the second quarter rose 8.7% from the same quarter a year ago. The mining index grew 15.15%, manufacturing 7.9% and electricity 5.6%.
Compared with the first quarter of this year, the IPI expanded by 4.8%, with the manufacturing index improving by 5.7%, electricity by 5.8% and mining by 0.4%.
“The second quarter performance is still relatively resilient and the strong manufacturing output cushioned the quarter's GDP,'' CIMB Securities economist Lee Heng Guie said.
Industrial production for the first six months of the year was up 8% from the same period last year as all three indices moved higher.
The department also clarified the industrial production numbers in April and May that appeared to have beaten expectations.
It said the manufacturing index – which like the other two indices is based on a survey – showed a preliminary reading of 233.1 based on feedback from 41.2% of the respondents. However, based on a response rate of 75.3%, the final reading had dropped to 218, the department said.
The same trend was observed in May, whereby the preliminary reading of the manufacturing index stood at 244.4 based on a response rate of 40.1% but fell to 231.2 when the response rate rose to 66.3%, it added.