Malaysia's industrial production poised to double its pace in February

Headline number to register a 7.4% expansion.

According to DBS, Malaysia's industrial production is expected to double its pace in February. The headline number due today will likely report an expansion of 7.4% YoY.

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This is will be slightly more than twice the growth rate of 3.6% recorded in the previous month. While last month’s number may have been depressed by seasonal factor (i.e., Chinese New Year), February output growth to some extent, was also helped by technical effect. 

The production index registered its lowest reading of 98.5 in February last year. And such low base naturally will play a part in lifting the year-on-year figure.

That said, economic conditions are undeniably improving. Export growth has been in double-digit level for the last 3 months (13% YoY) compared to a mere 2.5% for the entire 2013. 

In addition, trade surplus totalled MYR 16.8bn in the first two months of the year. That’s a massive 46% increase compared to the same period last year. While the bulk of the impetus came from Asia demand, accounting for 85% of the export recovery since 2H13, improvement has also been seen in sales to the US and the Eurozone.

Indeed, the recovery on the external front has been encouraging. And it will continue to keep overall industrial production buoyant in the coming months.