KUALA LUMPUR: Positive manufacturing momentum, in terms of production and sales, is expected to continue, AmResearch said.
This is given that imports are growing at a healthy pace, up 15.4 per cent year-on-year in November largely coming from capital imports and intermediate goods.
Therefore, the firm reaffirmed its 2017 and 2018 gross domestic product growth outlook of 5.9 per cent and 5.5 per cent respectively.
AmResearch noted that imports had increased 15.4 per cent year-on-year (YoY) in November, largely derived from increase in capital imports (up 12.2 per cent) and intermediate goods (up 13.8 per cent) YoY.
AmResearch expects a stronger US dollar/ringgit outlook this year with its end-period projection at 3.95 and full-year average at 4.00-4.02 (base case).
It added that the best case for end-period would be 3.76 with full-year average at the 3.80-3.82 levels.
Malaysia’s Industrial Production Index (IPI) grew by 5.0 per cent year-on-year (YoY) in November, underpinned by stronger growth indices primarily in manufacturing, mining and electricity.
The Department of Statistics Malaysia (DOSM) on Thursday said the output for the manufacturing index had increased 6.7 per cent, while both mining and electricity by 0.2 per cent and 3.9 per cent, respectively.
AmResearch said stronger manufacturing output was driven by manufacturing sales which continued to grow at double digits for the 12th consecutive month, up 10.9 per cent YoY.
“We believe the growth is being supported by the continued strong global demand for electronics, intra-regional trade flows and resource-based products,” it noted.
Public Investment Bank Bhd, meanwhile, expects last year’s IPI to reach 4.7 per cent, following better-than-expected IPI for November. The 2017 projection growth will be the highest since 2014.
PublicInvest noted the IPI for 2018 is expected to reach 5.2 per cent.
“We foresee some upside risks to 2018 projection should major economies produce stronger-than-expected growth.
“Of note, US, Eurozone and China registered strong PMI manufacturing numbers in December, which is the year’s peak and their best in the last few years,” it added.