IPI Continued to Grow in May-22 Supported by Higher Manufacturing and Electricity Output. But the growth in May-22 was slower than expected.
Malaysia’s IPI growth moderated further to +4.1%yoy in May-22 (Apr-22: +4.6%yoy), lower than our and market’s expectations.
Mining sector output fell sharper (-4.9%yoy) because of reduced production of crude oil and natural gas. Overall, the IPI growth in May-22 was supported by stronger manufacturing output (+6.9%yoy) and electricity generation (+2.7%yoy).
Robust growth in manufacturing sales
Manufacturing sales grew faster at +15.7%yoy in May-22, the highest annual growth in 5 months.
Higher sales growth was recorded for refined petroleum products, E&E, iron & steel, and motor vehicles, but sales of computers and consumer electronics grew at slower pace.
Growing domestic spending and sustained rise in foreign demand especially for E&E and other manufactured goods will support production to grow in coming months.
However, several risks such as rising price pressures and prolonged supply constraints could adversely affect final demand and production outlook. For now, we maintain our forecast for IPI growth this year at +4.3% (2021: +7.2%), says MIDF.