Malaysia: April manufacturing signals GDP acceleration in 2Q - ING

According to Prakash Sakpal, economist at ING, the 4.0% year-on-year in Malaysia’s industrial production growth in April was an acceleration from 3.1% in March and contrasts with the consensus view of a slowdown to 2.5% (ING forecast 2.4%).

Key Quotes

“The data is in line the earlier release of April exports, which showed a return to positive growth territory after two consecutive months of decline (+1.1% vs. -0.5% in March).”

“As well as industrial production, manufacturing sales growth also picked up in April to 6.8% from 5.7% in the previous month. On the flip side, manufacturing jobs growth slowed for the second consecutive month (1.7% vs. 1.8% in March), and wage and salary growth moderated to over a two-year low (4.4% vs. 5.1% in March).”

“Manufacturing drives GDP growth and the April data provides an initial gauge of GDP growth in the second quarter of the year.”

“We will look for more evidence of activity strength persisting in the months ahead before adjusting our 4.6% annual growth forecast for 2019. Given the intensified global trade risks, any upward adjustment is risky.”