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Malaysia Factory Production Rises

Malaysia Factory Production RisesMalaysia Factory Production Rises

Malaysia’s industrial production expanded in April, accelerating from the previous month but at a lower-than-expected rate, led by a surge in electricity generation and a modest increase in manufacturing activities, official data Friday showed.

The industrial production index—a measure of output from factories, mines, and power plants—rose 3.0% in April from a year earlier, the Department of Statistics said in a statement. That lagged a median 3.5% increase predicted by economists but was faster than March’s 2.8% year-on-year growth. In seasonally adjusted terms, industrial production contracted 0.8% from a month earlier, Asia Nikkei reported.

Economists say the continued weakness in key manufacturing activities amid sluggish global demand suggests a slow start to Malaysia’s trade-reliant economy in the second quarter after gross domestic product expanded 4.2% in the first three months of the year.

“With global demand slowing down, we may see weaker exports in the months ahead,” said Affin Hwang Investment Bank economist Alan Tan. Still, domestic-oriented industries could pick up the slack as private consumption recovers in the months ahead, he said. “But there could be some downside risks,” says Tan, who predicts Malaysia’s GDP to grow 4.3% in the second quarter and 4.5% for the entire 2016.

Malaysia’s manufacturing sector grew 3.3% year-on-year in April while the electricity index climbed 9.4% when compared to the same month last year. Mining activity meanwhile edged 0.6% higher from a year earlier.

On a seasonally-adjusted month-on-month basis, factory production contracted 2.1% in April while electricity output rose 1.2% from March. The mining industry meanwhile grew 1.7% in April from a month earlier.

 

Financialtribune.com