• IPI increased by 0.6% yoy and 0.6% mom

• Mining output remains in contraction

• Manufacturing production slows down

• Slower manufacturing sales in January

• Productivity increased by 1.2% yoy

• Global semiconductor sales down slightly in January

• Expect global IPI to go from bad to worse

• Bleak outlook for industrial production

IPI growth weaker in January

Malaysia’s industrial production index (IPI) increased by 0.6% yoy in January 2020, after a 1.3% rise in December 2019. It was the weakest growth in industrial output since October last year as manufacturing output growth eased. At the same time, electricity production edged down while mining output fell.

On monthly basis, the IPI increased 0.6% mom in January driven by the increase in all three index: manufacturing (Jan’20: +0.3%; Dec’19: +1.2%; Nov: -2.6%; Oct: +2.0%; Sep: +0.1%), electricity (Jan’20: +2.4%; Dec: +0.5%; Nov: -2.8%; Oct: +0.9%; Sep: -2.7%) and mining (Jan’20: +0.8%; Dec: -0.9%; Nov: +4.9%; Oct: +8.8%; Sep: - 1.0%).

In a seasonally adjusted terms, IPI edged down 0.04% due to the decrease in manufacturing index (-0.3%). Meanwhile mining index and electricity index increased by 0.6% and 3.2% respectively.

Source: BIMB Securities Research - 16 Mar 2020