KUALA LUMPUR, June 10 — MIDF Research has maintained Malaysia's industrial production index (IPI) growth forecast at 4.3 per cent this year, as it expects the supply chain disruption and rising commodity prices to affect local producers in terms of difficulty to source for materials and the continued upward pressure on production costs.
"However, on a positive note, the reopening of other economies including the easing of lockdown restrictions in China will support the growing global demand as well as improvement in the global supply chain.
"While the latest manufacturing PMI (purchasing managers index) reading (PMI grew to 51.6 per cent in April 2022) suggests little change to Malaysia’s manufacturing sector activities, we believe growing exports will continue to drive output growth in the export-oriented sectors, particularly electrical and electronics (E&E),” it said in a research note today.
"Furthermore, local business will continue to increase production in view of growing consumer spending. For now, we maintain our projection that IPI will grow at +4.3 per cent this year (2021: +7.2%)," it said in a research note today.
MIDF Research said Malaysia’s IPI increased at slower pace of 4.6 per cent year-on-year (y-o-y) in April 2022 against the house forecast of 4.5 per cent but below market consensus of 5.6 per cent y-o-y.
It expects a moderation in IPI growth as the moderate growth in April 2022 exports suggests a sustained but slower output growth for the export-oriented manufacturing sub-sectors.
"Manufacturing sales sustained double-digit growth for the eighth straight month. The value of manufacturing sales continued to grow albeit at a moderate pace, sustaining the double-digit y-o-y growth since September 2021.
"Manufacturing sales growth continued to be driven by strong sales of refined petroleum products, E&E, consumer electronics, and chemical products," it said. — Bernama