Malaysia industrial production index to dip 2%

This would mirror the anticipated slump in export figures.

According to DBS, industrial production index for July today is likely to reflect a slowdown in industrial activity. The headline number is expected to report a moderation to 2.1% YoY, from 3.7% in the previous month. In sequential terms, it’ll imply a 2% MoM sa drop. This should more or less mirror the weaker than expected export figure announced last week.

Here's more from DBS:

Exports for the month fell 1.9% YoY, resulting in a sharp drop in the trade balance to MYR 3.6bn, from MYR 9.2bn. While this could partially reflect the festive season lull in production and sales, the slowdown in the global economy is probably the main
reason.

PMIs of key export markets have been sliding further south and key electronics industry is now in a cyclical decline due to demand weakness. So hope should not be high as far as the industrial production number is concerned.

In fact, both industrial production and export numbers are expected to remain lacklustre in the coming months as the external demand continues to retreat on the back of global uncertainties.

The external drag will intensify if the problem in Europe remains unresolved and the US continues to slow. Malaysia’s own domestic engine will not be able to pick up all the slack. This would imply a weaker growth momentum ahead.