Published April 10, 2009

M'sia's output shrinks by a smaller 19% in Feb

Electrical/electronic sector posts steep 41% contraction

By PAULINE NG
IN KUALA LUMPUR

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MALAYSIA'S manufacturing output continued to slump, shrinking nearly 19 per cent in February from a year ago mainly on the back of a large contraction in electrical & electronic (E&E) output.

But month-on-month, the decline was only 0.7 per cent - and also not as sharp as January's 26 per cent plunge year-on-year.

Even so, manufacturing for the first two months of the year was almost 23 per cent lower compared to the same time last year.

Malaysia's February manufacturing data appears to be in line with other export-oriented nations such as Taiwan and Singapore that have already reported a smaller contraction in output from the month before. But economists noted that the trend needs to be sustained over the next few months before it could be ascertained that recovery was in sight.

Most see the 'horrible numbers' continuing for a bit yet, a fact seemingly confirmed by the sustained decline in E&E production where output fell 41 per cent, which suggests the bottom has yet to be reached.

February's industrial production index (IPI) score of 89.5 reflected a near 15 per cent slump from a year ago, as falls were recorded in all three indices of manufacturing, mining and electricity. It was the first time since 2003 that the index had dipped below 90.

On a monthly basis, the IPI was lower by nearly 4 per cent, and, for the cumulative two months of the year, registered a decline of 17.4 per cent against the same period last year.

The lower manufacturing output wasn't confined to electronics. Softer global demand also led to a 20 per cent decline in the output of wood products, furniture, paper products and printing, as well as a 6 per cent drop in petroleum, chemical, rubber and plastic products.

Similar weakness was seen in the mining sector where February output was 7.3 per cent lower from a year ago owing to drops in crude oil and natural gas of almost 8 and 6 per cent, respectively.

But mining output registered a bigger monthly decline of nearly 10 per cent.

Another indicator of sluggish economic activity was electricity output which decreased 3 per cent from last year, and for the first two months, output was 8 per cent less than the same period last year.