Malaysia's June industrial production expected to still remain in the game

Despite exports shocking disappointment.

Malaysia's industrial production in June is expected to remain healthy despite the slight disappointment on exports, with the headline number expected to report an expansion of 5.5% YoY.

According to a research report from DBS, while this is down from 6.1% in May, it is still in line with the monthly average pace of 5.1% for the first five months of the year.

June’s export performance came in below expectation.

The headline printed an increase of 7.9% YoY against market expectation of a 15% rise.

Here's more from DBS:

While it may appear to be a huge disappointment, it pays to note that a near 8% expansion is still exceptionally encouraging.

Year-to-date, exports have been growing at a solid pace of about 12.6% per month.

So plainly, either market expectation has gotten too far ahead or June’s number is just merely a downside blip.

We expect export and industrial production growth to remain robust in the coming months.

A gradually improving global economic environment will remain supportive of industrial activity.

While the pace of improvement may be tepid at times, the pick-up in demand will no doubt help to alleviate the gradual cooling down in domestic growth.

Overall, Malaysia's GDP growth for the full year remains on track to meet our projection of 5.2% in 2014.