• IPI edged up by 5.1% yoy in March

• The expansion of IPI was contributed by the increment in all three sectors

• Manufacturing sales sustained double digit growth in March

• Manufacturing sales increased 13.9% yoy; up 9.8% mom in March

• Productivity went up by 11.2% yoy in March

• Global semiconductor sales grow 23% in 1Q22

• Global industrial production expands at slower rate in March

• Industrial production will continue to grow this year but risk remains high

IPI edged up by 5.1% yoy in March

Malaysia’s industrial production index (IPI) edged up by 5.1% yoy in March, up from a 3.9% gain in the previous month. March’s IPI marked the seventh month of expansion since September 2021 while also the strongest growth in 3 months. The expansion of IPI was due to improvement in domestic demand and sustained external demand. The expansion in IPI for March 2022 was attributable to the improvement in the index of manufacturing (+6.9%) and electricity (+0.8%). Likewise, mining rebounded by 0.3% during the month, the strongest in 4 months.

On a monthly basis, the IPI rebounded by 8.6% in March, underpinned by all segments. The on-month expansion was attributable to a renewed global demand and diversion in demand amid war and China’s lockdowns. The positive growth was seen in electricity index (+13.0%), manufacturing (+8.5%), and mining output (+7.2%). In seasonally adjusted terms, IPI in March 2022 contracted by 0.7%. Both the mining index and electricity index contracted by 2.1% and 0.3%, respectively. On the back of sustained operational activities, manufacturing output expanded by 0.1%.

The IPI for 1Q 2022 grew by 4.5% yoy, following a rise of 6.9% in the previous quarter. This positive growth was attributable to the growth in manufacturing index (6.3%) and electricity index (3.7%). Meanwhile, mining index contracted 1.8%

Source: BIMB Securities Research - 11 May 2022