Malaysia's IPI grows 1.1% in June, mining down 9.4%

PETALING JAYA: Malaysia’s Industrial Production Index (IPI) growth moderated to 1.1% in June 2018 compared with the same month a year ago, due to a contraction in mining output.
This compares with the 4.6% expansion in May.
According to the Department of Statistics, the growth in June was supported by an increase in the manufacturing (+4.5%) and electricity (+3%) sectors, while the mining index fell 9.4%.
For manufacturing output, the major sub-sectors which saw growth were electrical and electronic equipment products (+5.4%); petroleum, chemical, rubber and plastic products (+3.4%); and non-metallic mineral products, basic metals and fabricated metal products (+5.2%).
The decline in the mining sector was due to the decrease in the natural gas index (-15.7%) and crude oil index (-2.2%).
MIDF Research has cut its IPI growth forecast to 3.8% from 4.3% for 2018. For the second half of the year, it is expected to expand between 3.5% and 4.5%.
“Moving forward, we foresee IPI to expand at steady pace for the second half of 2018 amid escalating trade tension, moderating inflation and supportive policy changes for businesses such as tax-holiday and stable retail fuel prices.”