KUALA LUMPUR (April 26): Malaysia’s producer price index (PPI), which measures price changes for goods at the producer level, increased by 1.6% year-on-year in March 2024, compared with 0.3% in February, said the Department of Statistics Malaysia.

In the latest monthly report on PPI local production, chief statistician Datuk Seri Dr Mohd Uzir Mahidin said all sectors registered an increase in March, contributing to the increase in the overall index.

The mining sector inclined 8.3% (February: 5.3%), due to the index of extraction of crude petroleum (-11%). 

At the same time, the agriculture, forestry and fishing sector increased by 5.5% (February: 6%), with the index of growing of perennial crops going up by 9%, and animal production by 3.8%. 

The manufacturing sector increased slightly by 0.6% from a negative 0.7% in the previous month, due to the manufacture of computer, electronic and optical products (6.8%), and manufacture of chemicals and chemical products (1.4%). 

“For the utility sector, the electricity and gas supply index went up by 0.1%, and water supply by 6%,” he said in a statement. 

Month-on-month, PPI local production increased by 1.6%, versus 0.7% in February, contributed by all sectors. 

The agriculture, forestry and fishing sector went up 4.3% (February: 2.6%), due to the growing of perennial crops (7.4%) and animal production (1%).

The mining sector rose by 2.3% (February: 5.7%), attributed to the extraction of crude petroleum (2.3%).

Mohd Uzir also said PPI local production recorded an increase of 0.4% in the first quarter of 2024 (1Q2024), after a decrease of 1% in 4Q2023. 

The agriculture, forestry and fisheries sector went up by 4.9%, followed by the mining sector (4%) and water supply (3.4%). 

However, manufacturing posted a decline of 0.3%, and electricity and gas supply a negative 0.2%. 

"Meanwhile, quarter-on-quarter, the PPI inched up 0.6% against a negative 0.3% in 4Q2023," said Mohd Uzir.

A comparison of selected countries showed that the PPI of the US increased by 2.1% in March against 1.6% in February. 

Besides, the UK inflation rate was 0.6%, up from 0.4% in February, due to refined petroleum products and other outputs. 

Japan’s PPI edged up 0.8% from a 0.7% rise in the prior month.

"China’s producer price continued to shrink 2.8%, compared with a 2.7% drop in the previous month. 

"This marked the 18th consecutive month of contraction in factory gate prices since last November, highlighting persistently weak demand as the economy needed fresh stimulus, linked to further drops in mining and quarrying and raw materials," he said. 

Mohd Uzir further said that Malaysian property prices are anticipated to grow significantly in the first half of 2024 (1H2024), due to rising cost of building materials, based on the Real Estate and Housing Developers’ Association's (Rehda) Market Outlook for 2024. 

According to Rehda, as of December 2023, average prices of sand and concrete in Malaysia had increased by more than 10% from a year earlier.

This translated into construction cost that is expected to increase on average by 15% in 1H2024.

https://www.theedgemarkets.com/node/709488