Malaysia’s industrial production up 4.6% in August

It’s going to be a festive year end, too.

A rebound is expected for Malaysia’s August industrial production, bringing the sector back on track.
According to a report by DBS, the headline number due tomorrow is likely to register an expansion of 4.6% YoY, up from a modest 0.5% in the previous month. Nonetheless, the previous month’s number looks paltry because of a high base in the same period last year.

DBS adds that August’s number should be viewed as a reversal back to trend. Indeed, industrial production growth has been steady, registering an expansion of 4.6% per month on average since the start of the year.

Here’s more from DBS:

Going forward, production activity may accelerate as manufacturers ramp up their production to meet the year end festive demand. To this the volume thus far has been stronger than in previous year. In addition, from a structural perspective, Malaysia’s manufacturing sector has benefited indirectly from the decline in competitiveness of Singapore’s manufacturers.

A strong SGD and rapid cost escalation in the island state have significantly impacted its manufacturers’ ability to compete in the global arena. In the process some of the demand has been diverted over to the Malaysian counterparts. And this is further compounded by the relocation of some production capacity over to Malaysia, a result of Singapore’s domestic restructuring.