Industrial output up 1.5%

KUALA LUMPUR: Malaysia’s Industrial Production Index (IPI) grew 1.5% in February 2021 compared with a year ago underpinned by growth in the manufacturing index.

The IPI consists of three main sectors, which are mining, manufacturing and electricity.

“The IPI grew 1.5% in February compared with the same month of the previous year. The growth of IPI in February was driven by the manufacturing index with an increase of 4.5%, ” said chief statistician Datuk Seri Dr Mohd Uzir Mahidin. (pic below)

February’s expansion undershot the 2% growth forecast by 11 economists in a Reuters poll, but was faster than the 1.2% rise recorded in January.

In a note, Moody’s Analytics said manufacturing appears to be the key sector to buoy Malaysia’s industrial production with a strong external demand cushioning the downturn.

“Manufacturing has been the bright spot in industrial output, with positive year-on-year growth since June 2020. The global shortage of semiconductors in the automobile sector, together with other manufacturing powerhouses in the region buttressed the manufacturing output.

“We expect industrial production to pick up in the coming months from robust external demand and low base effect from the previous year.

“Sustained growth in external demand will continue to bolster the production outlook for trade-oriented industries, given the strong demand for electrical and electronics, and rubber products and better economic prospects for major trading partners such as the US and China, ” it said.

Meanwhile, the mining and electricity index dropped 6% and 5.8% respectively.

The manufacturing sector output based on year-on-year comparison rose by 4.5% in February after recording a growth of 3.5% in January.

The major sub-sectors contributing to the growth in the manufacturing sector for the month were electrical and electronics products (10.3%), petroleum, chemical, rubber and plastic products (8.9%) and transport equipment and other manufactures (3.2%).

The export-oriented industries drove the growth in the manufacturing sector by 5.8% while domestic-oriented industries increased by 1.8%.

The mining sector output dropped 6% in February compared with the same period in the previous year.

The deterioration was due to the decrease in the crude oil and condensate index (-11.5%) and natural gas index (-1.6%).

Meanwhile, the electricity sector output contracted 5.8% in February compared with a year ago.

In a separate report, Mohd Uzir also noted that Malaysia’s manufacturing sales in February grew 6.4% year-on-year to RM118.4bil. However, on a monthly basis, the sales value decreased by 3.6%.

“The year-on-year increase in February was driven by electrical and electronics products (10.3%), food, beverages and tobacco products (9.0%) and transport equipment and other manufactures products (8.2%), ” he said.

Mohd Uzir added that the total employees engaged in the manufacturing sector in February was 2,228,415 persons, a decrease of 2.2% compared with 2,277,882 persons in February 2020.

The salaries and wages paid amounted to RM7.52bil in February 2021, a decrease by 1.2% against the same month last year.

Simultaneously, the sales value per employee rose by 8.8% to record RM53,138 compared with the same month in 2020.

Meanwhile, the average salaries and wages per employee was RM3,374 in February 2021.

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