KUALA LUMPUR, March 12 — Moody’s Analytics expects Malaysia’s Industrial Production Index (IPI) to pick up in the coming months on the back of robust external demand for electronics as well as a rise in oil prices.
The financial intelligence and analytical tools provider said with the industrial production growth of 1.2 per cent year-on-year (y-o-y) recorded in January 2021, Malaysia’s manufacturing sector had expanded for the second month in a row despite domestic movement control orders to contain the spread of Covid-19.
Although restrictions were not as strict as the first round in March last year, strong export growth more than offset any decline in domestic demand, it said.
“Malaysia has benefited from the global shortage of semiconductors in the automobile sector, together with other manufacturing powerhouses in the region.
“Production of rubber products boosted the manufacturing index as well, as global demand for medical rubber gloves continue to thrive amid the pandemic,” it said in a report today.
Moody’s Analytics noted that the country lifted its strict movement control order (MCO) in Kuala Lumpur, Selangor, Johor and Penang last week, and most of the country was currently under the less stringent conditional MCO.
Travel between districts are now allowed, and more businesses will be permitted to resume operations.
However, it said interstate travel was still banned for most states, which would curb domestic travel.
On Tuesday, Senior Minister Datuk Seri Ismail Sabri Yaakob announced that travel for tourism would be allowed under the targeted bubble travel between states under the recovery MCO.
Earlier today, the Department of Statistics Malaysia announced that the IPI grew 1.2 per cent y-o-y in January, driven by the increase in the manufacturing index.
Chief statistician Datuk Seri Dr Mohd Uzir Mahidin, however, said the mining and electricity indices declined by 4.5 per cent and 4.6 per cent, respectively, while the manufacturing sector’s output rose by 3.5 per cent y-o-y in January.
In a statement, he said the major sub-sectors contributing to the growth were electrical and electronics products (7.9 per cent), petroleum, chemical, rubber and plastic products (4.5 per cent) and wood products, furniture, paper products and printing (2.4 per cent). — Bernama
