Industrial output growth is likely to continue on a positive note on the back of strong support from domestic consumption and a weak external demand in the background.
A Business Times poll points to an average 3.71 per cent growth in output, which covers manufacturing, electricity and mining activities for June.
The Statistics Department will release the data today.
RHB Research says industrial output is supported by domestic demand activities until the support from external demand comes in at the end of the year.
OCBC economist Gundy Cahyadi said recent data have clearly shown that there is a gap between the strength of export growth and that of industrial production index (IPI) growth.
"To us, this indicates that domestic demand has been managing to sustain its support on the overall economy fairly well.
"About 70 per cent of Malaysia's manufacturing is still export-oriented. Thus, the economy needs a stronger export growth to give it a boost," he said.
The recent trend in export growth, where weakness is clearly the dominant theme, is disconcerting to say the least.
Exports shrank in June as shipments of both electrical and electronics and commodity-based products such as palm oil and rubber products decreased.
HSBC Bank head of Asia economics Frederic Neumann said although things have picked up nicely in developed markets, the feed through to emerging markets is lacking, which was odd.
China's wobble is playing a big part, he remarked.
"Don't despair though, at least inventories are down in Asia. That's got to be something," he said.