Malaysia: Industrial production growth disappoints in January
Industrial production expanded 3.0% from the same month of the previous year in January, coming in a tad above the 2.9% expansion recorded in December but falling well shy of market expectations of 7.1% growth in the month. Analysts had expected stronger factory output growth to be induced by a favorable base effect stemming from the lunar new year holiday period, which fell in February this year compared with January last year. Not only did January’s print disappoint in that regard, but the figure was the second-lowest result in over a year and a half.
According to the Statistical Institute, a deceleration in manufacturing output growth accounted for all of January’s weakness, expanding 4.8% annually compared with growth of 5.3% in December. Production growth in the all-important electrical and electronics segment moderated marginally, while output growth in the food, textiles, furniture and petroleum and chemical sectors all suffered more sizeable decelerations. Softness in the manufacturing sector offset a rebound in mining output—both petroleum and natural gas output bounced back to expansion from contraction in December—and slightly faster electricity output growth.
The disappointing performance observed in January was also observable in sequential terms. On a month-on-month basis, industrial production shrank a seasonally-adjusted 1.0% in January, which followed a smaller 0.2% drop in December. Annual average growth in industrial production was steady at 4.5% in January.