• IPI slows to 0.3% yoy in August

• Growth in IPI led by manufacturing component, while the mining and electricity segments showed a decrease

• Slower growth in manufacturing sales

• Productivity slows to 4.3% yoy

• Growth in global semiconductor sales continue in August

• Global production recovery continues as IPI signal upturn

• Industrial production will continue to recover supported by growing domestic spending and increased trade activities

IPI slows to 0.3% yoy in August

Industrial production (IPI) rose by 0.3% yoy in August, slowing from a 1.2% yoy growth a month earlier, amid ongoing COVID-19 pandemic. Growth in IPI for August was led by a rise in the manufacturing component, while the mining and electricity segments showed a decrease.

On monthly basis, the IPI in August declined 1.2%. Based on month-on-month comparison, the weakening of IPI in August was due to the increase in the index of manufacturing (-1.9%). On the other hand, the mining and electricity segments showed increases of 0.3% mom and 2.9% mom respectively. In a seasonally adjusted terms, IPI in August recorded a deterioration of 0.5% due to the decline in manufacturing index of 0.8%. However, the mining and electricity index recorded an increase of 3.9% and 2.8% respectively.

The IPI in the period January to August 2020 recorded a decline of 6.4% as compared to the same period of the previous year. This deterioration was due to the decrease in all indices; mining index (-9.4%), manufacturing index (-5.6%) and electricity index (-5.0%).

Source: BIMB Securities Research - 13 Oct 2020