[KUALA LUMPUR] Malaysia’s industrial production index (IPI) rose 4.8 per cent year on year (yoy) in November, supported by resilient growth in tech sectors, according to figures released by the Department of Statistics on Wednesday (Jan 11).

This was slightly higher than October’s growth of 4.6 per cent, and also exceeded the 3 per cent average expectation of 11 economists in a Reuters poll.

The expansion of IPI in November was led by increments of 6.1 per cent in the mining index, 4.8 per cent in the manufacturing index and 1.2 per cent in the electricity index.

In a research note on Wednesday, Barclays economist Brian Tan said the tech sector continues to lead Malaysia’s IPI growth, defying the tech industry’s downcycle and regional slowdown in manufacturing activity.

He noted that the country’s electronic industrial production remained resilient, driving Malaysia’s tech segment to continue to outperform its regional peers. 

“This likely reflects a favourable product mix and possibly some diversion of production to Malaysia out of China due to earlier lockdowns,” he added.

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In the mining sector, the main contributors were the natural gas index (8.2 per cent), and crude oil and condensate index (3.1 per cent).

Within manufacturing, electrical and electronics products (12.1 per cent) contributed the most, followed by transport equipment and other manufacturers products (6.5 per cent) and food, beverages and tobacco products (4.8 per cent).

However, manufacturing of wood, furniture and paper products fell 3.6 per cent in November.

Domestic-oriented industries recorded a growth of 4.3 per cent, supported by vehicles production activities and processed food products. Export-oriented industries grew 5.1 per cent, driven by computer, electronics and optical products.

From January to November, Malaysia’s IPI increased 7.3 per cent yoy. This was supported by manufacturing, which rose 8.7 per cent, electricity (5.1 per cent) and mining (2.7 per cent).

Barclays estimates Malaysia’s gross domestic product (GDP) growth in the fourth quarter will moderate to 8 per cent, from 14.2 per cent in the third quarter, partly due to an unfavourable base effect. This is consistent with the research firm’s earlier projection of 9 per cent GDP growth for 2022 and 4.5 per cent in 2023. 

In tandem with the IPI performance, Malaysia’s manufacturing sales data also showed strong growth.

The country’s manufacturing sales value surged 11.8 per cent yoy to RM159.2 billion (S$48.4 billion) in November, according to a separate report released on Wednesday.

Growth in sales value was largely driven by electrical and electronics products, as well as petroleum, chemical, rubber and plastic products.

From January to November, the sales value of the manufacturing sector increased close to 17 per cent yoy to RM1.6 trillion.