Industrial Production Rises at Fastest Pace in a Year

Technorati Tags : Malaysia Industrial Production, Malaysia Economic Indicator, IP, GDP

Announced: Wednesday, 6 February at 12:01 pm (Malaysia time)

Industrial Production (% YoY) - Actual 5.7%, Forecast 1.8%, Consensus: 2.7%, Previous 3.2%.

Bottom Line

Industrial production surprised on the upside in December, led by robust manufacturing production. The surprisingly strong manufacturing numbers may have been lifted by resilient domestic demand, as well as production ramp ups ahead of the Christmas holidays. Notwithstanding the surprisingly strong December data, we maintain the view that manufacturing production will slow over the next 3-6 months as the US economy slips into recession, posing severe headwinds for electronics exports.

In Brief

Industrial production (IP) growth picked up to 5.7% in December 2007, beating consensus forecasts (+2.7%), and the fastest growth in a year. November production growth was also revised upwards to 3.2%, from 2.7% previously. Strong December production was entirely due to a 6.8% jump in manufacturing output, up from 3.1% in November, and strongest since November 2006. Mining grew at the same pace as in November (+3.3%), while electricity production slowed to 2.3%, from 3.3% in November. For full-year 2007 as a whole, industrial production rose 2.2%, a sharp slowdown from 4.8% in 2006. Manufacturing edged up just 1.9%, from 7.5% the previous year.

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