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Steady growth in industrial production [11-01-2013]  
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Industrial output in Malaysia remained on a steady growth momentum in November, rising by 7.5 per cent.

The growth, which was present in all its indices - manufacturing (7.6 per cent), mining (7.5 per cent) and electricity (6.0 per cent), showed resilience of the domestic economy, economists said.

According to the Statistics Department, the manufacturing output growth was due to increases in major sub-sectors which included wood products, furniture, paper products, printing (12.1 per cent) and electrical and electronic (E&E) products (9.7 per cent).

The output for the mining sector also rose on the back of increases in the crude oil index and natural gas index by 6.3 per cent and 9.9 per cent respectively.



CIMB Investment Bank chief economist Lee Heng Guie said the positive momentum was a positive sign that the economy should still expand at a steady pace in the fourth quarter of 2012.

"Domestic market-oriented industries continue to take charge amid a slow mend in export-oriented sectors, particularly electrical and electronic products."

He expects industrial output in Malaysia to continue to expand but at a slow pace in the first half of 2013 before picking up in the second half.

CIMB has revised its GDP outlook for 2012 from four per cent to 4.5 per cent from three per cent to 3.5 per cent previously.

MIDF Research said the strong growth in manufacturing output could be attributed to the domestic-oriented manufacturing activities.

"We believe the positive growth came from construction-related activities benefitting from an estimated RM36 billion contracts awarded in 2012 to Bursa-listed construction companies as opposed to RM11.9 billion in 2011," its economist Anthony Dass said.

Consumer-related manufacturing activities have also complemented the domestic-oriented manufactu-ring activities .

"The export-oriented manufacturing activities would have contribu-ted positively to the manufacturing output."

Anthony also expects the growth in the manufacturing sector to continue to come from domestic-oriented manufacturing activities, in particular the construction-related manufacturing activities.

Lee observed that the manufacturing sector gained traction to grow 7.6 per cent (6.6 per cent in October), the highest growth rate in nine months, backed by higher production of transport equipment, E&E and refined petroleum products.

"Going forward, output of E&E products would recover at a gradual pace as more new technology and design innovations start to boost demand in the second half of 2013."

Domestic market-oriented industries remain the pillar of support for overall manufacturing output, largely buttressed by the progressive implementation of Economic Transformation Programme (ETP) and the 10th Malaysia Plan projects.

Meanwhile, the manufacturing sector posted a 7.4 per cent growth in November to record RM51.1 billion in sales. The year-on-year improvement was attributed to the higher sales in 74 of 116 industries which included the manufacture of semiconductor devices and motor vehicles as well as the parts and accessories for their engines.

Year-to-date, the sales value of the manufacturing sector rose 5.4 per cent to register RM570.7 billion in the first eleven months of the year from a year earlier.

Source:BUSINESS TIMES
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