KUALA LUMPUR: The Industrial Production Index (IPI) grew slower than consensus expected in July 2010. The IPI in July 2010 merely increased by 3.2% year on year (YoY) as compared with July 2009 vis-à-vis the consensus estimate of 5.5%.
This was the slowest growth since early of the year. However, the latest YoY IPI growth was pretty much in-line with our expectations of 3.8% due to high base effect.
As compared with the IPI in June 2010, IPI increased by 1.7% month on month (MoM) in July 2010. This was a better MoM figure contrary to a dip of 2.8% in June 2010.
The slower pace of growth in July 2010 was due to the increases in only two indices out of three. Manufacturing Index up 7.2% YoY and Electricity Index advanced 4.4% YoY. However, the index of Mining posted a decrease of 5.9% YoY.
Chart from Statistics DepartmentThe decrease of 5.9% in output for the Mining sector was due to the decrease in the crude oil index (-10.7%). However, natural gas index increased by 5.4%. As compared with the preceding month, the Mining output increased to 2.1%.
The YoY increase of 4.4% and MoM increase of 2.7% in the Electricity output was in-line with the higher output of Manufacturing.
The Manufacturing output in July 2010 increased 7.2% as against July 2009. Output for June 2010 increased by 13.1% (revised vs. 13.3% previously) as compared with the same month of 2009.
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