Malaysia’s industrial production remains upbeat on support from electricity, manufacturing

Industrial production in Malaysia stayed high in May on support from electricity and manufacturing sectors that led to the rise in index. However, production remained subdued this month as compared to the corresponding period a year ago.

Malaysia's May industrial production grew by a better-than-expected 2.7 percent from a year exceeding a survey that had predicted 2.5 percent growth, data released by Malaysia’s Statistics Department showed Tuesday. However, it remained slower than April's year-on-year growth of 3 percent due to the decline in the mining output by 1.1 percent.

The index of industrial production rose 0.9 percent in May m/m, compared to that in April. For the period of January to May of 2016, the IPI expanded by 3.1 percent from the previous corresponding period. The expansion was supported by increase in manufacturing index by 3.9 percent and electricity index by 9.0 percent. The mining index fell 0.3 percent.

Meanwhile, a private manufacturing purchasing managers' index showed Malaysian factory activity in June contracted for the 15th straight month, with production falling at its sharpest rate since October 2012.

Commenting on the manufacturing sector, the statistics department said the sector output in May expanded further 3.6 percent, but remained slower than the growth of 3.3 percent in April 2016. On a seasonally adjusted month-on-month basis, the department said manufacturing output rose 0.4 percent in May 2016.

In addition, Malaysia's exports in May had fallen unexpectedly, as global oil prices remained weak. Also, the ongoing disturbances in the global economy are likely to weigh on the economic and financial performance of the country in the near term.