KUALA LUMPUR, July 12 (Xinhua) -- Malaysia's Industrial Production Index (IPI), an economic indicator to measure production output of manufacturing, mining, and utilities, rose 4.6 percent year-on-year in May, boosted by strong growth in manufacturing sector, the Statistics Department said Wednesday.
The IPI growth was better than the 4.2 percent growth in April. It also came in higher than the Bloomberg consensus estimate of 4.1 percent.
The manufacturing index continued to record a significant growth of 7.3 percent in May, after an expansion of 6.7 percent recorded in April, the department said.
The growth in manufacturing sector was mainly underpinned by electrical and electronics products (E&E) and food, beverages and tobaccoes.
The electricity index also grew 2.5 percent, after a decrease of 1.5 percent recorded in April.
The mining index, however, declined by 2.3 percent, due to decrease in crude oil index.
Alan Tan, chief economist with Affin Hwang Investment Bank, said the results have shown signs of sustainability in Malaysia's economy. "The growth indicates the GDP in second quarter may be slightly better than my expectation," he said.
In view of better-than-expected manufacturing growth, he upgraded the second quarter GDP forecast to 5.5 percent, which is slightly slower than 5.6 percent in the first quarter.
Due to sustained manufacturing sector momentum for the remainder of first half, Alliance Bank chief economist Manokaran Mottain also reckoned that second quarter GDP growth could be robust at around 5.2 percent.
However, he did not rule out downside risks to the manufacturing in the second half as the purchasing managers index in June fell to a record low of 46.9 in June, on the back of lower new orders and production.
