IPI grows 1.2% in July 2019

11 Sep 2019 / 19:58 H.

PETALING JAYA: Malaysia’s Industrial Production Index (IPI) Malaysia growth slowed down to 1.2% in July 2019 as compared with the same month of the previous year, due to lower mining output.

The IPI expanded 3.9% in June.

Chief statistician Malaysia Datuk Seri Dr Mohd Uzir Mahidin said the growth was driven by the increase in the Index of Manufacturing (4%) and Electricity (2%).

However, the Index of Mining recorded a decline of 8.4%.

The major sub-sectors contributing to the increase in manufacturing output were electrical and electronics products (4.9%); petroleum, chemical, rubber and plastic products (3.4%); and non-metallic mineral products, basic metal and fabricated metal products (4.4%).

Meanwhile, the decrease in the mining output was attributed to a 22.7% drop in the Crude Oil and Condensate Index, but the Natural Gas Index increased 7.3%.

MIDF Research is maintaining its IPI growth forecast of 2.9% for 2019.

“Manufacturing sector, which accounts for about 70% of IPI weight, is expected to perform modestly in 2H19 amid escalating trade tensions and that could drag the overall IPI performance this year.”

Nevertheless, the research house said support to the IPI growth would come from the Overnight Policy Rate cut effects, easing monetary policy measures by developed and emerging economies, low inflationary pressure, stable domestic demand and positive progression in construction sectors.

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