Search
Related News
Category :

October factory output up 2.8% [ 15-12-2011 ]

PETALING JAYA: October's factory output, as measured by the industrial production index (IPI), unexpectedly increased by 2.8% on an annualised basis following gains in the manufacturing and electricity sub-indices.

The median consensus among economists in a Bloomberg survey was for a 1.6% expansion in October year-on-year.

Of the sub-indices, manufacturing gained 6.2% year-on-year and electricity gained 1.9% while mining posted a decline of 5.7%.

Month-on-month, October IPI also expanded by 2.8% while September's IPI was revised to 3% from 2.5%.

AmResearch Sdn Bhd director of economic research Manokaran Mottain expected the index to be volatile in the coming months despite gains in manufacturing production possibly from rising Japanese demand and surprising strength in the US manufacturing activities.

 Citigroup remains cautious on the outlook for manufacturing although there are tentative signs of a stabilisation in E&Es demand. - Filepic of Tanjung Pelapas Port in Johor

He said in a statement that continued uncertainty in the eurozone was reflected by the reversing trend observed in the demand for electrical and electronics (E&Es) products.

“The possibility of these economies underperforming has increased, with heightened recession risks in the Organisation for Economic Development and Cooperation countries, thus dragging the growth in the emerging markets in this part of the world,” Manokaran added.

However, he said Malaysia's economic growth would continue to be sustained by domestic demand in the form of private consumption and investment in the quarters ahead even though exports growth might ease.

Manokaran said the final quarter's growth would still be sustainable at around 5% to 6% on a year-on-year basis with favourable labour market conditions and lower inflation levels would enable a decent full-year growth of around 5% this year.

Meanwhile, Singapore-based Citigroup Inc senior economist Kit Wei Zheng said in a report that the sub-indices for manufacturing and electricity had actually edged lower when compared with September's data while mining's decline has moderated.

He said manufacturing decline was broad-based with E&Es production falling back into a year-on-year decline while mining's decline moderated sharply.

Kit remains cautious on the outlook for manufacturing although there were tentative signs of a stabilisation in E&Es demand because a recession in Europe, strength of rebound in demand and the boost of easing supply disruptions from Japan could have peaked.

“The true bottom to industrial production especially manufacturing may still be one to two quarters away,” he said.

 

     Related News

 more

     Links

      Local Activities

 more

Managed by Mydotnets Sdn Bhd