(March 12): Malaysia’s factory output rebounded at a faster-than-expected pace in January led by a surge in manufacturing activities while mining output and electricity generation also rose, official data on Tuesday showed.

The industrial production index — which measures output from factories, mines and power plants — rose 4.3% in January from a year earlier, the Department of Statistics Malaysia said in a statement. That compares to the median 2% rise predicted in a Bloomberg poll of economists and Dec’s 0.03% year-on-year decline.

The increase in January was also the highest growth since May 2023. On a month-on-month basis, the index rose 2% in January.

The latest reading dovetails with the surge in industrial production in other economies including Singapore, Vietnam, South Korea, Taiwan and the US while the decline in Japan and Thailand narrowed.

The key manufacturing sector climbed 3.7% in January from a year earlier after contracting 1.4% in the previous month. Mining meanwhile accelerated to 5% in January from December’s 4.1% growth and electricity surged 8.3% in January versus a 4.1% gain in December.

The turnaround in manufacturing activities in January was driven by “the vibrant performance of domestic-oriented industries” while export-oriented industries returned to positive territory, said chief statistician Datuk Seri Dr Mohd Uzir Mahidin.

The expansion in domestic-oriented industries was mainly reinforced by a 12% increase in manufacturing of motor vehicles, trailers and semi-trailers followed by fabricated metal products and food processing products, he noted.

Meanwhile, expansion in output of rubber, plastic, and chemical products were the main drivers of export-oriented industries, he added.