Malaysia: Industrial production loses steam in December
February 7, 2020
Industrial production lost momentum in December, increasing 1.3% year-on-year, down from the revised 2.1% rise in November (previously reported: +2.0% year-on-year). The result underwhelmed market expectations of 2.0% and rounded out a weak quarter for the industrial sector, signaling growth likely remained relatively subdued in Q4. On the whole, growth in industrial output averaged 2.4% in 2019, which was well below 2018’s 3.0% average growth rate.
A downturn in mining and quarrying output and slowing electricity generation underpinned December’s slowdown. Conversely, a pick-up in manufacturing production bolstered growth thanks to stronger output of electrical and electronics products, and transport equipment.
On a month-on-month seasonally-adjusted basis, industrial production fell 0.4% in December, contrasting the 1.8% rise in November (previously reported: +1.0% month-on-month).
Looking ahead, an expected recovery in global demand for electronics and positive trade dialogue between the U.S. and China in recent months should support industrial production growth. That being said, the recent outbreak of the coronavirus, which has clouded the region’s growth outlook and weighed heavily on commodity prices poses a downside risk.
Author: Lindsey Ice, Economist