Malaysia's January IPI up 4.3% y-o-y, fastest pace since May 2023

KUALA LUMPUR: Malaysia’s industrial production index (IPI) rose 4.3% increase in January, rebounding from a minor decline of 0.03% in December 2023.

The pace of growth was the fastest since May of the previous year, during which IPI rose by 4.7%.

The 11 economists surveyed in a Reuters poll had predicted a 2% expansion in January's output.

The Statistics Department (DOSM), in a statement, said the IPI increase in January was spearheaded by a surge of 3.7% in the manufacturing sector as compared to the negative 1.4% recorded in the previous month.

Additionally, the mining sector sustained its upward trend by registering 5.0% while the electricity sector accelerated at a faster pace of 8.3%.

In comparison with the preceding month, the IPI improved by 2.0% as against the negative 1.3% recorded in the previous month.

DOSM said the turnaround of 3.7% in the manufacturing sector in January 2024 was driven by the vibrant performance of omestic-oriented industries which picked up to 8%, while export-oriented industries returned to positive growth of 1.6% after seven consecutive months in negative territory.

“The favourable output performance in the export-oriented industries was mainly attributable to the increase in the manufacture of rubber products (8.5%); manufacture of plastics products (7.5%); and the manufacture of chemicals & chemical products (6.1%),” DOSM said.

Additionally, the department said manufacture of computers, electronic & optical products also returned to positive growth at 0.4%, contrasting with the previous month’s decline of 7.2%.

The turnaround aligned with the upward trajectory observed in the global semiconductor industry for the month as reported by The Semiconductor Industry Association (SIA).

“This year-on-year expansion mirrored the country's export performance, which rebounded to 8.7% in January 2024, after contracting since March 2023. In a month-on-month comparison, the export-oriented industries grew marginally by 0.2% (December 2023: -3.3%),” DOSM said.

Meanwhile, the uptick in production of the mining sector in January 2024 was induced by a 6.6% expansion in natural gas production and 2.6% in the crude oil & condensate output.

As compared to December 2023, the mining index accelerated by 3.1% as against 2.8% registered in the previous month.

The generation of electricity advanced further by 8.3% in January 2024 after registering an increase of 4.1% in the preceding month.

In comparison to the previous month, the electricity index increased to 2.0% from 1.4% recorded in December 2023.

“On a global scale, the IPI for several other countries surged in January 2024, including Singapore, Vietnam, South Korea, and Taiwan, with marginal growth seen in the United States. Conversely, while Japan and Thailand experienced a decline in their IPI, the decrease was less pronounced, showing a small negative,” DOSM said.

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