• IPI increased by 1.7% yoy but dropped 11.6% mom

• Weaker production from manufacturing and electricity

• February manufacturing sales grow at a modest pace

• Productivity increased by 3.4% yoy

• Global semiconductor sales continue to slide

• Global IPI roller coaster ride continues

• IPI growth momentum to be slower

Industrial production registered sustained growth in January

Malaysia’s industrial production index (IPI) grew by 1.7% yoy in February, slowing markedly from 3.2% growth in January. It marked the weakest growth in industrial output since June 2018. The growth in February was supported by the increase in the index of electricity (Feb: 4.9%; Jan: 7.8%; Dec: 2.7%) and manufacturing (Feb: 3.7%; Jan: 4.2%; Dec: 4.4%). Meanwhile the index of mining slumped 5.0% after a 0.9% fall in the previous month.

On monthly basis, the IPI dropped 11.6% in February, after a 1.3% increase in January due to the decline in all indices: manufacturing (Feb: -10.2%; Jan: 1.6%; Dec: 0.5%), electricity (Feb: -10.6%; Jan: 3.3%; Dec: 1.2%) and mining (Feb: -16.2%; Jan: -0.9%; Dec: +1.0%). In seasonally adjusted terms, IPI in January decreased 2.0% mom due to the decrease in all indices: electricity (-3.1%), manufacturing (-0.3%) and mining (-6.8%).

The IPI for the period January to February 2019 increased by 2.5% yoy. The increase was contributed by the growth in electricity sector (6.4%) and manufacturing sector (3.9%). Meanwhile, the mining sector declined by 2.8%.

Source: BIMB Securities Research - 12 Apr 2019