• IPI contracted 0.5% yoy in October
• Declined in IPI for October dragged mainly by the mining index
• Electricity output showed a positive growth while the manufacturing output registered slower growth
• Manufacturing sales moderated in October
• Productivity increased 4.7% yoy in October
• Global semiconductor annual sales projected to increase 5.1% in 2020
• Production to remain weak for the rest of the year amid new wave of COVID-19

IPI contracted 0.5% yoy in October

Industrial production (IPI) contracted 0.5% yoy in October, after increasing by 1.0% a month earlier, due to a significant decrease in the IPI’s mining component and as manufacturing-sector output growth slowed. This was the first time decline in industrial output since June, as the country contended with the economic impact of the COVID-19 pandemic.

On monthly basis, the IPI in September increased 1.7%. Based on month-on-month comparison, the growth in IPI for October was due to the surged in the mining (7.6%) and electricity (4.1%) segments. Meanwhile, growth in the manufacturing index slowed to 0.1% mom. In a seasonally adjusted terms, IPI in October showed a downturn of 1.8% due to the fall of 1.8% in mining index and 1.7% in manufacturing index. However, the electricity index recorded an increase of 0.1%.

The IPI in the period January to October 2020 recorded a decline of 5.1% as compared to the same period of the previous year. This decrease was due to the deterioration in all indices; mining index (-9.5%), electricity index (-4.1%) and manufacturing index (-3.8%).

Source: BIMB Securities Research - 14 Dec 2020