Never saw it coming: Industrial production fell by -2.5% in May

The unexpected fall was driven by two sectors.

Electronics and pharmaceuticals pulled industrial production down, the former by -7.5% on lower outputs of semiconductors, data storage and computer peripherals, while the latter by -9.2% on lower output of pharmaceutical ingredients.

According to Maybank, the fall was softened by chemicals production and transport engineering, the former up for the 6th consecutive month with an expansion of 8.6%, driven by petrochemicals and specialties.

Chemicals production saw growth in production capacities, leading to petrochemicals segment of NODX reporting its 11th consecutive month of double-digit growth in May. Meanwhile, transport engineering picked up on the rebound in Aerospace which advanced from the lows last year when demand for repair and maintenance jobs from US and Europe were weak, while the sub-cluster of marine and offshore engineering helped to supplement the cluster’s growth via additional rig-building projects.