• IPI advanced by 12.1% YoY in June  The expansion was supported by higher manufacturing and electricity output

• Manufacturing sales surged 23.4% YoY in July

• Global industrial production slowed in July

• Growing demand and increased consumer spending will continue to support production outlook

IPI advanced by 12.1% YoY in June

Malaysia’s Industrial Production Index (IPI) expanded by 12.1% YoY in June, accelerating sharply from a 4.1% rise in the prior month. While marking the tenth straight month of increase in industrial output, the latest figure was the fastest since May 2021. The expansion of IPI was contributed by manufacturing, electricity and mining sectors, with the increment of 14.5%, 14.1% and 2.1% respectively.

On a monthly basis, the IPI accelerated to 9.6%, the most since June 2020, rebounded sharply from a 1.0% fall in May. This was primarily due to an increase in manufacturing production (12.9% MoM) and mining output (1.6% MoM). In contrast, electricity output decreased by 2.7% MoM. In a seasonally adjusted terms, IPI in June recorded a growth of 8.4%. The increment was driven by the rise of 8.9% in manufacturing index, 7.1% in mining index and 3.5% in electricity index.

The IPI for 2Q22 grew 6.9% YoY, attributed by the growth in manufacturing index (9.3%) and electricity index (5.8%). Meanwhile, mining index contracted 1.1%. The IPI in the period of January to June 2022 recorded an expansion of 5.7% YoY. This increment was supported by the manufacturing index (7.8%) and electricity index (4.7%). Meanwhile, mining index shrank 1.4%.

Source: BIMB Securities Research - 10 Aug 2022