Weaker-than-expected Industrial Production Index (IPI) number could be a prelude for weaker manufacturing numbers ahead, albeit high base effect, says MIMB Investment Bank.
Hence, it expects a slower domestic economic growth, going forward.
Coupled with the slowing growth of the global economy in the second half of 2010 and in 2011, the real Gross Domestic Product (GDP) growth is to slow down between 4.5 per cent and 5.5 per cent year-on-year in the third quarter of this year from 8.9 per cent in the second quarter of 2010 and 10.1 per cent in the first quarter, the bank said in a research note today.
The sales value of the manufacturing sector in July continued to post a year-on-year growth of 9.3 per cent to record RM45.7 billion as compared to RM41.8 billion reported in the same month last year.
Month-on-month, the sales value also increased by 1.5 per cent or RM691.3 million as compared with the preceding month,it said.
'As expected, we have seen slowing growth in output in the manufacturing sector, especially in electronics and electrical segment, on the back of a weaker growth in exports,' said MIMB.
Meanwhile, the IPI grew slower than expected in July and in fact, it was the slowest growth since early this year.
The bank said the IPI merely increased by 3.2 per cent year-on-year as compared with July 2009 vis-a-vis the consensus estimate of 5.5 per cent.
'However, the latest year-on-year IPI growth was pretty much in line with our expectations of 3.8 per cent due to high base effect,' it added. -- Bernama
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