• IPI moderated to 3.9% yoy in February
• Manufacturing and electricity remained key contributors to IPI expansion
• Manufacturing sales sustained double digit growth in February
• Manufacturing sales increased 11.2% yoy; down 5.3% mom in February
• Productivity went up by 8.8% yoy in February
• Soaring demand continues to drive global semiconductor sales
• Ukraine war reverberates in global industrial production
• Industrial production to face a challenging road

IPI moderated to 3.9% yoy in February

Malaysia’s industrial production index (IPI) moderated to 3.9% yoy in February, down from a 4.3% gain in the previous month. Still, February’s IPI marked the sixth month of expansion since September 2021 while also the weakest growth in 5 months. The expansion of IPI was due to improvement in domestic demand and sustained external demand. The expansion in IPI for February 2022 was attributable to the improvement in the index of manufacturing (+5.2%) and electricity (+3.9%). However, mining fell by -0.4% during the month.

On a monthly basis, the IPI contracted by 6.6% in February, underpinned by all segments. The on-month contraction was caused by a higher inflationary climate and prolonged supply disruptions. The negative growth was seen in electricity index (-8.4%), manufacturing (-7.2%), and mining output (-3.8%). In seasonally adjusted terms, IPI in February 2022 expanded by 5.2%. All major sectors recorded a rebound, particularly the mining index (+8.6%) and manufacturing index (+4.0%). On the back of higher consumption, electricity output also rebounded (+2.8%).

The IPI for the period of January to February 2022 recorded a growth of 4.1% compared to the same period of the previous year. This positive growth was driven by an increase of 6.0% in manufacturing and 5.4% in electricity outweighed a 2.8% drop in mining.

Source: BIMB Securities Research - 12 Apr 2022