Malaysia economy: Industrial sector continues to grow in October

Event

Malaysia’s industrial production expanded at a rapid pace for the second consecutive month in October.

Analysis

Industrial output increased by 5.8% year on year in October, as the oil and natural-gas sector ramped up production and demand from the construction sector remained very strong. The performance demonstrated how Malaysia is managing to shake off the chilly blasts that are coming in from the export sector as a result of the global economic slowdown. Mining output grew by 6.1%, representing an acceleration from a gain of 3.5% in September, while natural-gas production rose by 9% and crude oil output increased by 4.6%. Mining output tends to be volatile but has been particularly so during the past two years owing to maintenance shutdowns and production problems.

Manufacturing, which has the largest weighting in Malaysia’s overall industrial production index, increased by 5.9% year on year in October. The impact of weak global demand was evident in the bellwether electrical and electronic products sector, where output declined by 1.5%. By contrast, the petroleum, chemical, plastics and rubber sector appears to be holding up very well, with output increasing by 7.1%.

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