Malaysia: Industrial output hits a six-month high in April
June 11, 2019
Industrial production surged 4.0% year-on-year in April, up from March’s 3.1% expansion and surpassing market analysts’ expectations of a 2.7% outturn. April’s print reflected a stronger expansion in the manufacturing sector and a rebound in the mining sector.
In month-on-month terms, industrial output expanded 2.0% in April, jumping from March’s 1.2% increase. Meanwhile, annual average growth in industrial production was unchanged at 2.8%, where it has been since January this year.
Moreover, manufacturing sales picked up in April, while the average manufacturing PMI reading over April and May came in higher than the Q1 average. This tentatively signals that growth is picking up steam in the second quarter, despite the general weakness in manufacturing activity observed throughout Asia in the last few months.
Commenting on this month’s reading and the growth outlook, Prakash Sakpal, economist at ING, noted:
“The surprisingly strong activity growth signals a pick-up in GDP growth in the current quarter. Moreover, favourable base effects are also at work, and should assist in driving GDP growth higher over the remainder of the year. We will look for more evidence of activity strength persisting in the months ahead before adjusting our 4.6% annual growth forecast for 2019. Given the intensified global trade risks, any upward adjustment is risky.”
Author: Steven Burke, Economist