Malaysia: Industrial output contracts for the first time in four months in October
December 11, 2020
Industrial production dropped 0.5% on an annual basis in October, swinging from September’s 1.0% increase and contracting for the first time in four months. October’s downturn was largely attributed to a stronger decline in mining and quarrying output. Meanwhile, manufacturing production growth moderated in the month.
Similarly, on a seasonally-adjusted monthly basis, industrial output slid 1.8% in October, contrasting September’s 1.0% rise and logging the worst reading since April. Lastly, the trend deteriorated marginally, with the annual average variation of industrial production coming in at minus 3.9% in October, down from September’s minus 3.8%.
Commenting on October’s downturn as well as the outlook ahead, Euben Paracuelles and Rangga Cipta, analysts at Nomura, said:
“This was the first negative IP growth print since June and was, in our view, largely due to the reimplementation of conditional movement control orders (CMCO) in most of the states since early October. […] We reiterate our 2020 GDP growth forecast of -6.3%, lower than BNM's latest forecasts of -3.5% to -5.5% and the government’s -4.5%.”