Malaysian industrial output growth quickens as exports gain

Malaysia’s industrial production growth accelerated in December as manufacturing and electricity output increased as exports climbed.

Production at factories, utilities and mines gained 3 per cent from a year earlier after rising a revised 2.4 per cent in November, the statistics department said today. That compares with the median estimate for a 1.7 per cent increase in a Bloomberg News survey of 17 economists. Exports rose 6.1 per cent from a year earlier, according to the trade ministry.

Asian economies from China to India have reported an improvement in manufacturing numbers this year, suggesting the region is withstanding the impact of Europe’s sovereign-debt crisis. Bank Negara Malaysia kept interest rates unchanged last month, saying the economy showed signs of “continued expansion” and will keep growing, aided by public spending.

“New orders are rising as reflected in strong restocking of inventories,” Rahul Bajoria, a Singapore-based economist at Barclays Plc said in a report today after the announcements. “The picture for exports remains robust, given Malaysia’s position as the only major net commodity exporter in the region.”

Commodities account for more than 30 per cent of Malaysia’s exports, mainly in the form of palm oil and liquefied natural gas, Barclays said. Palm oil prices have risen 8 per cent over the past year, according to data compiled by Bloomberg.

Manufacturing output gained 4.5 per cent in December from a year earlier, easing from a revised 5 per cent increase in the previous month, today’s report showed. Mining fell 0.8 per cent, while electricity production climbed 3.1 per cent.

Manufacturing sales rose 1.1 per cent in December from a year earlier, easing from a revised 6 per cent gain in November, the statistics department said in a separate report.

The International Monetary Fund cut its forecast for global growth this year to 3.3 per cent on January 25 in light of Europe’s debt crisis, predicting that Asia would lead expansion.

“Growth in Malaysia’s exports is expected to follow this path,” Mustapa Mohamed, the nation’s international trade and industry minister, told reporters in Kuala Lumpur today. “China, Southeast Asia and India will continue to be the major drivers of export growth.”

Malaysia’s exports were forecast to rise 6 per cent in December from a year earlier, according to the median estimate of 18 economists in a Bloomberg News survey. Overseas shipments rose 8.7 per cent in 2011.

Imports increased 10.4 per cent in December from a year earlier, and climbed 8.6 per cent in 2011. The trade surplus was 8.31 billion ringgit ($2.8bn) in December and 120.3bn ringgit for the year.