1. Industrial Production Index (IPI) is a measure of the rate of change in the production of industrial commodities in real terms over time for Manufacturing, Mining and Electricity Sectors.
2. It is measured based on volume changes in production. IPI are the overall index from the Index of Mining, Manufacturing and Electricity. IPI give the overview of the current trend of industrial activities and used for economic analysis.
3. Industrial production and capacity levels are expressed as an index level relative to a base year. Within the overall IPI, there are a number of sub-indices providing a detailed look at the output of highly specific industries.
4. Industry-level data are useful for managers and investors within specific lines of business, while the composite index is an important macroeconomic indicator for economists and investors—fluctuations within the industrial sector account for most of the variation in overall economic growth.
5. At the same time, IPI differs from the most popular measure of economic output, gross domestic product (GDP): GDP measures the price paid by the end-user, so it includes value-added in the retail sector, which IPI ignores.
IPI MALAYSIA DECEMBER 2022
1. Industrial Production Index (IPI) grew by 3.0 per cent in December 2022 after recording an increase of 4.8 per cent in November 2022. The expansion in December 2022 was propelled by Mining index (4.1%) and Manufacturing index (3.0%).
2. Meanwhile, the Electricity index turned downward to negative 1.1 per cent during the month. In terms of month-on-month comparison, the IPI weakened by 0.6 per cent as against the expansion of 0.9 per cent registered in the previous month.
3. The output in the Manufacturing sector expanded by 3.0 per cent in December 2022 driven by Electrical & Electronics Products (7.2%); Transport Equipment & Other Manufactures (8.5%); Food, Beverages & Tobacco Products (3.4%); and Non-metallic Mineral Products, Basic Metal & Fabricated Metal Products (2.2%). Smaller declines were recorded in the output of Petroleum, Chemical, Rubber and Plastic Products (-0.9%); and Textiles, Wearing Apparel, Leather Products & Footwear (-0.5%). Meanwhile, the production of Wood Products, Furniture, Paper Products & Printing continued to decline by 4.3 per cent (November 2022: -3.6%).
4. The production of export-oriented industries rose by 2.7 per cent (November 2022: 5.1%) while domestic-oriented industries increased by 3.8 per cent (November 2022: 4.3%). The expansion in the export-based industry was anchored by the manufacture of computers, electronics & optical products; and the manufacture of coke & refined petroleum products. In the meantime, the growth of the domestic-oriented industry was underpinned primarily by the manufacture of motor vehicles, trailers & semi-trailers; and the manufacture of fabricated metal products, except machinery & equipment.
5. The output in the Mining sector advanced by 4.1 per cent in December 2022 after the expansion of 6.1 per cent in November 2022. The growth of this sector was supported by the increment of 5.1 per cent in the Crude Oil & Condensate index and 3.3 per cent in the Natural Gas index. As compared to the previous month, the Mining index grew by 1.1 per cent (November 2022: 3.5%).
6. Overall for the final quarter of 2022, the IPI grew at a slower rate of 4.1 per cent (Q3 2022: 12.2%) as compared to the same quarter of the previous year. The increase was attributed to the growth in Manufacturing (4.0%) and Mining (6.2%) indices. Meanwhile, Electricity index edged down by 0.5 per cent.
7. Analysing the performance of 2022, the IPI expanded by 6.9 per cent as compared to the same period of the previous year (2021: 7.2%). The increment in the Manufacturing index (8.2%); Electricity index (4.5%); and Mining index (2.8%) supported the growth in 2022.
Source:
https://www.dosm.gov.my/v1/index.php?r=column/cthemeByCat&cat=91&bul_id=cS9pVk53TVoxLzNnVXhlRzFKZUF5UT09&menu_id=SjgwNXdiM0JlT3Q2TDBlWXdKdUVldz09
https://www.investopedia.com/terms/i/ipi.asp
