Stronger Manufacturing Activity Lifts IPI In November: RHB

KUALA LUMPUR, Jan 11 (Bernama) -- Malaysia‘s industrial activities gained pace in November 2017, after slowing for two consecutive months, said RHB Research Institute Sdn Bhd. The industrial production index (IPI) jumped to five per cent year-on-year (y-o-y) in November 2017 compared with 3.4 per cent in October and 4.7 per cent in September. “The pick-up was mainly on the back of a stronger growth in manufacturing production, but offset partly by a slowdown in electricity and mining output during the month,” it said in a note Thursday. RHB said over a two-month period, the activity, however, slowed down in October-November, suggesting that real gross domestic product (GDP) growth in the fourth quarter of 2017 could slow to around 5.0 per cent y-o-y from 6.2 per cent in the previous quarter. “We expect the country’s real GDP to chart a more moderate growth of 5.2 per cent in 2018 from the 5.6 per cent estimated for 2017, against 4.2 per cent in 2016. “This is on the back of slower export growth after a surge in 2017 and a slowdown in public spending, in line with the government’s fiscal consolidation drive,” said the research firm. However, it said real GDP growth would remain supported by resilient domestic demand, backed by relatively strong consumer spending and private investments during the year. RHB said manufacturing activities jumped in November, driven by a pick-up in output of electrical and electronic products. “Likewise, the manufacture of petroleum, chemicals, rubber and plastics and transport equipment also gained pace, while mining activities continued to ease in November, amid a decline in natural gas output,” it said, adding that electricity output slowed in November. Manufacturing sales, however, inched lower to 10.9 per cent y-o-y in November from 11 per cent in the preceding month. Factories toned down their hiring of workers, with employee headcount in the sector edging lower to 2.3 per cent y-o-y in November from 2.4 per cent in October. As a result, the research firm said the sales value of manufactured products per employee slowed marginally to 8.4 per cent y-o-y during the month from 8.5 per cent in October. RHB Research Institute Sdn Bhd is a research firm providing equity, economic, fixed income and currencies research. -- BERNAMA