Malaysia’s IPI surged 9.3% in March from a year ago

Malaysia’s IPI surged 9.3% in March from a year ago

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Malaysia’s industrial production index (IPI) surged 9.3% in March 2021 from a year ago, exceeding a Bloomberg survey of an 8.7%.

As the growth was powered by the manufacturing and electricity segments. This was the strongest growth since July 2013.

Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin said the growth of IPI in March 2021 was driven by the manufacturing index which expanded by 12.7 and electricity index which increased by 10.3%.

However, he said the mining index dropped by 1.9%.

He said manufacturing output continued to expand in March 2021 after recording a growth of 4.5% in February.

The major sub-sectors contributing to the growth in manufacturing sector in March 2021 were transport equipment & other manufactures.

Petroleum, chemical, rubber & plastic products and electrical & electronics products.

Mohd Uzir said the export-oriented industries underpinned the growth of the manufacturing sector by 12.4% while domestic-oriented industries increased by 13.4%.

“The growth of the manufacturing sector was also driven by the high capacity utilisation rate especially in electrical & electronic products and petroleum, chemical, rubber & plastic products sub-sectors.

“In addition, the performance of the manufacturing sector also in line with the notable growth in exports and IPI for some of main trading partners of Malaysia,” he added.

As for the mining sector output dropped 1.9% in March 2021 as compared to the same period of the previous year.

The deterioration was due to the decrease in crude oil & condensate index. The natural gas index grew positively 4.3%.

However, the electricity sector output expanded by 10.3 % in March 2021 from a year ago.

For the first quarter, the IPI increased by 3.9% from a year ago.

The growth was due to the 6.8% expansion in the manufacturing index. The mining and electricity sectors recorded a deterioration of 4.1% and 0.1%.

Source: The Star

Malaysian commodity sector help grew GDP

Malaysian commodity sector help grew GDP

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The commodity sector contributed RM85.1 billion to the country’s gross domestic product (GDP) last year, Plantation Industries and Commodities Minister Datuk Mohd Khairuddin Aman Razali said.

He said of the amount, RM48.3 billion was contributed by the palm oil sector.

“Knowledgeable and skilled human capital is needed to ensure that the country’s commodity sector performance remains sustainable.

“This factor is important so that the productivity of the commodity sector can be further enhanced to generate revenue for the country,” he said at the launch of the virtual Agricommodity Career Carnival 2021 today.

The carnival, which is jointly organized by the ministry and the Social Security Organisation (Socso) under the Ministry of Human Resources, focuses on several commodity sectors such as palm oil, rubber, timber, kenaf, cocoa, and pepper, offering more than 60,000 job vacancies.

Mohd Khairuddin called on locals, especially job seekers, to seize the opportunity to get suitable jobs through the carnival.

“The ministry will continue to work with Socso to help the agro commodity industry get the manpower it needs by giving priority to locals, including Orang Asli,” he said.

The carnival is also in line with the Perikatan Nasional government’s policy to regain control of the manpower in the agro commodity industry, which is dominated by foreigners who accounted for 75 percent of the workers, by replacing them with locals.

There were more than 8,600 job vacancies offered by 26 employers in the plantation and commodity sector at the carnival and about 3,000 locals, including graduates and Orang Asli, will take part in the two-day carnival.

People can register participation at the Website

Besides the virtual interview session today, a briefing on the PenjanaKerjaya 2.0 and MYFutureJobs Portal, as well as a webinar session on Career Opportunities in the Agriculture Sector, will also be held

Source: MalayMail

Malaysia unemployment rate rose to 4.5%

Malaysia unemployment rate rose to 4.5%

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Labor force survey conducted by the government showed that the unemployment rate for 2020 rise to a record level of 4.5% due to the ongoing Covid-19 pandemic.

“The unemployment rate rose to 4.5% in 2020, the highest rate recorded since 1993 (4.1%),” chief statistician Datuk Seri Mohd Uzir Mahidin (pic below) said in a press statement yesterday.

The Statistics Department said the health crisis had a huge impact on the labor force which led to the unemployment rate moving above 4% compared to an average of 3% pre-Covid-19 pandemic.

Compared to the previous quarter, the fourth quarter 2020 showed that the number of the unemployed rate increased 0.1 percentage point from 4.7%.

In December 2020, unemployment rose to 772,900 persons at an unemployment rate of 4.8%.

The labor market condition in December 2020 which was still influenced by the health crisis and economic consequences has caused slower recovery momentum in the labor market, the Statistics Department said.

“In the fourth quarter of 2020, there were 533,7000 persons who worked less than 30 hours per week due to working conditions or insufficient work compared to the third quarter at 403,800 persons.

Out of this total, 369,100 persons were categorized as time-related underemployment since they worked less than 30hrs a week and were able and willing to work extra hours from the 3Q at 300,800 persons,” Uzir Mahidin said.

He said that this category of people comprised 2.4% of the overall employment in the fourth quarter of last year.

“In the meantime, skill-related underemployment which comprises of those with tertiary education but working in semi-skilled and low-skilled occupations accounted for 1.89 million persons or 37.4% of the total of employed persons with tertiary education which is an increase from the third quarter of 1.76 million persons or 36.8%,” he said.

Source: TheStar

Singapore’s green lane agreements suspended

Singapore’s green lane agreements suspended

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Singapore green lane arrangements with Germany, Malaysia, and South Korea will be suspended for three months starting today, in view of a resurgence of Covid-19 cases worldwide.

The Republic will review these suspended green lane arrangements at the end of the period, the Ministry of Foreign Affairs said on Saturday (Jan 30). Green lanes allow essential travel for business or official purposes between two countries.

Travelers who have already been approved to enter Singapore under these arrangements can continue with their plans, MFA added.

Singapore had agreed on green lanes with Germany, Malaysia, and South Korea in October, August, and September respectively last year. Its other arrangement with Malaysia, the Periodic Commuting Arrangement, will not be affected.

Green lane arrangements still exist with some countries like China.

The suspension shows the dynamic nature of the situation, which is constantly being evaluated, Mr. Wong Soon-Hwa, chair of the Pacific Asia Travel Association, told The Sunday Times.

Mr. Wong said: “Should the situation change, we must be prepared for suspension or cancellation of plans. It will be very frustrating and disruptive but is necessary.”

Impacts of the suspended agreements

The lasting impact of such suspended agreements on travel can only be known later, experts said, as much remains unknown – such as whether vaccinations could prove to be a game-changer in reducing the risk of transmission and infection.

Singapore University of Social Sciences associate professor of economics Walter Theseira added that the suspension of the green lanes would not put Singapore at too much of a disadvantage.

While travel arrangements for business are valuable, the regions where the green lanes are suspended are generally those where nobody is traveling, internationally or domestically, because of the heightened Covid-19 risk.

So in that sense, with everyone on a similar playing field, Singapore will not be at a disadvantage, Prof Theseira said. Singaporeans keen to travel might also find it wiser to shelve the idea for now.

Prof Theseira said: “Covid-19 vaccines might protect traveling Singaporeans, but it wouldn’t protect them against border closures, flight cancellations, and not being able to get routine medical treatment in case of a healthcare crisis in the region they are at.

“It is also unlikely that the authorities would exempt them from border controls simply based on vaccination, given the lack of accepted vaccination standards internationally.”

This is not the first time Singapore has put the brakes on existing travel arrangements. In November last year, plans for an air travel bubble arrangement with Hong Kong, which would facilitate leisure travel, went up in smoke and had to be delayed in the light of a spike of Covid-19 cases in Hong Kong.

Source: Straits Times

Malaysia rank fifth as an emerging market

Malaysia rank fifth as an emerging market

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Malaysia is ranked fifth among 17 other developing countries according to a Bloomberg study that gauges their outlook for 2021 based on 11 indicators of economic and financial performance.

In the study, Malaysia has ranked ahead of other ASEAN countries such as the Philippines (ranked 10) and Indonesia (ranked 12).

Thailand (ranked No. 1) is ahead of Malaysia in the study, while India (ranked 11) and China (ranked 17).

The study cited various data points including that Malaysia has a forecast GDP growth rate of 6.8% in 2021 and a fiscal balance of -5.4% of GDP next year.

In its note on Malaysia, the study highlighted the undervalued current real-effective-exchange rates (REER) compared with the five-year averages compared to peers with z-scores of negative 1.4 or below.

Besides Malaysia, what other countries have undervalued REER?

Other countries having undervalued REER included Brazil, Turkey, and Hungary.

“Many emerging market economies are poised to recoup economic losses, judging by various metrics surveyed by Bloomberg,” the report said.

It noted that among the main factors for this is healthy foreign reserves, more so in Asia which would provide a cushion from external shocks.

However, it said that elevated debt-to-GDP readings will be worth monitoring for stability risks.

The report said that as the global recovery takes hold, and the US Federal Reserve keeps interest rates low, risk appetite should continue to strengthen in 2021.

This would be supported by favorable valuations and attractive real yields that would in turn lure foreign buyers, it pointed out.

It also highlighted other structural weaknesses especially worsened current account deficits, namely in Colombia and Turkey.

“These countries are vulnerable to a negative shock,” the report said.

“Fiscal deficits, especially in Brazil, South Africa, and the Philippines, have added to high government debt burdens.

“The debt burdens in South Africa, Hungary, India, and Brazil are also a cause for concern,” it added.

It also highlighted Goldman Sachs’s effective lockdown indexes which indicate that most developing economies stand to gain a lot in terms of activity catch up once the pandemic is brought under control.

“In the latest readings, Malaysia, Chile, and the Philippines have the most room to subside in 2021. Those indexes should all eventually converge close to zero,” it said.

It noted that the surveys show that analysts are penciling in high rates of growth next year for some of the countries that have been hardest-hit in 2020. “Each of the top five growth rates for 2021 is from Asia, led by India, China, and the Philippines,” it said.

Singapore and Malaysia in talks about HSR

Singapore and Malaysia in talks about HSR

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Singapore and Malaysia are still in discussions over the twice-delayed high-speed rail (HSR) project, which has until Dec 31 before officials have to make a final decision on its status, a Singapore Ministry of Transport spokesman has said.

The ministry was responding to a Malaysian news report on Sunday, quoting an unnamed source, that said Malaysia is planning to continue the project without Singapore’s involvement and end the line – which starts in Kuala Lumpur – in Johor, not Jurong East.

Asked for its comment, a Singapore Ministry of Transport spokesman on Sunday said both countries are still in talks.

“Singapore and Malaysia are in discussions on the Kuala Lumpur-Singapore High-Speed Rail (HSR) project.

“As communicated in the Dec 2 joint statement by both prime ministers, we will announce further details on the HSR project in due course,” the spokesman said.

The report in The Malaysian Insight news site quoted the source as saying the Malaysian government will pay Singapore just under $105 million as compensation if it opts to proceed with the project on its own.

“Malaysia will need to compensate Singapore with a payment of $104.67 million. It must be paid by Dec 31,” the source said.

How much will be the sum that Malaysia will have to pay Singapore if the cancer the HSR?

The sum is less than half of the $250 million cited last month by the Free Malaysia Today news site that Singapore would seek as the price to drop the deal.

Malaysia’s Ministry of Transport declined to comment when contacted.

The TMI report said the Malaysian Cabinet decided last Friday that Malaysia will not continue working with Singapore on the project.

If Malaysia were to complete the HSR on its own, the project would cost around RM65 billion (S$21.4 billion), excluding the trains, the source told TMI.

The original 350km rail project was to run from a terminal station in Bandar Malaysia in downtown Kuala Lumpur, cross the Strait of Johor near the Second Link, and stop at a terminal in Jurong East.

The HSR was slated to have several other stations in between – in Seremban (Negri Sembilan), Ayer Keroh (Melaka), and three Johor stops in Pagoh, Ayer Itam and Iskandar Puteri.

TMI reported that Malaysia had asked to build an HSR station at the Kuala Lumpur International Airport, which Singapore had rejected, with the source claiming that the Republic perceived this as a threat to its aviation industry.

Source: The Strait Times

kuala lumpur cityscape during sunrise

Budget 2021: Malaysia wants to recover the ringgit

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With Budget 2021 expected to be the most challenging amid uncertainties, clearer signs of economic recovery are needed for the ringgit to move higher.

Bank Muamalat Malaysia Bhd economist Izuan Ahmad said whether the ringgit would strengthen would depend on the actual success factors pertaining to the containment of COVID-19.

“At the moment, it is difficult to gauge the potential upward momentum of the ringgit, although it could become somewhat clearer when the latest economic data and figures are published, most of which are expected to be in a better position, given the country’s ongoing road to recovery,” he told Bernama.

He said a weaker ringgit against the US dollar would boost the country’s export sector and definitely benefit players such as rubber glove manufacturers, which are also riding on the enhanced global demand due to the pandemic.

On the other hand, it would have an opposite impact on those relying on imported materials or parts.

What the Budget 2021 could bring?

“As such, Budget 2021 could contain measures that would work both ways amid the ongoing uncertainties of the global economic and financial conditions, that is, depending on the upward or downward momentum of the local currency.

Overall, he said Budget 2021 is expected to be among the most challenging in recent years, as it is a tall order for the government to formulate a satisfactory budget amid the uncertainties, which is now made worse as evidence of political instability is starting to rear its ugly head.

“As such, the expected measures under Budget 2021 would likely focus more on the well-being of the people and the affected segments from the ongoing COVID-19 pandemic and resulting lockdowns.

Malaysia’s Budget 2021 will be tabled this Friday, after been deferred from Oct 2.

In September, Malaysia’s trade surplus surged by 149.3 percent year-on-year to RM21.97 billion, the highest trade surplus ever recorded for the month.

Smart Indian engineer man wearing safety helmet doing stock tick check and cardboard stock product management in factory warehouse background and profit chart grow up

September brought an increase in exports to Malaysia

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Malaysia’s exports in September expanded by a stronger pace of 13.6% to RM88.93bil, far exceeding a Bloomberg survey of a 1.7% increase, as shipments of manufactured products jumped.

The Ministry of International Trade and Industry (MITI) said in a statement on Wednesday that the September exports were the highest export value ever recorded for this month. On a month-on-month basis, exports rose 12.4% from August’s RM79.13bil.

“Exports of manufactured goods in September 2020 which made up 87.7% of total exports picked up by 16.3% y-o-y to RM77.99bil.

“The expansion was due mainly to higher shipments of electrical and electronic (E&E) products, rubber products, other manufactures especially solid-state storage devices (SSD), iron and steel products as well as optical and scientific equipment,” it said.

Exports breakdown in September

Exports of agriculture goods (7.4% share) surged by 26.6% to RM6.55bil compared to September 2019 buoyed mainly by higher exports of palm oil and palm oil-based agriculture products.

Exports of mining goods (4.5% share) declined by 27.4% y-o-y to RM4.02 billion on account of lower exports of liquefied natural gas (LNG).

MITI said E&E products drove exports to ASEAN as exports rebounded by 6.7% to RM23.1bil.

As for exports to China, they sustained double-digit growth for four consecutive months, surging by 41.9% to RM15.56bil mainly on higher exports of E&E products, iron and steel products as well as palm oil and palm oil-based agriculture products.

Exports to the US continued to expand for four consecutive months, with double-digit growth of 22.1% to RM10.32bil in September 2020.

Malaysia’s total trade in September 2020 expanded by 5.5% to RM155.88bil compared to a year ago.

The trade surplus in September 2020 surged by 149.3% year-on-year (y-o-y) to RM21.97bil and was the highest trade surplus ever recorded for this month.

Compared to August 2020, total trade, exports and imports grew by 7.5%, 12.4%, and 1.6%, respectively. Trade surplus recorded a significant expansion of 66.3%.

Source: Today Online

Electricity workers and pylon silhouette

Singapore to import electricity from Malaysia

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Singapore is set to import electricity from Malaysia as early as next year in a trial to diversify the country’s energy supply.

Making the announcement on Monday, Trade and Industry Minister Chan Chun Sing said: “We will kick this off by importing 100 megawatts of electricity imports for a trial period of two years to see how the market works and to see how the technical challenges can be overcome.

“This will allow the region to share the clean energy sources that different countries may have.”

He was speaking on the first day of the Singapore International Energy Week, an annual energy conference involving international policymakers and industry commentators, held in the Sands Expo and Convention Centre at Marina Bay Sands.

In a media release on Monday, the Energy Market Authority (EMA) said that it plans to issue a Request for Proposal by March next year for 100 megawatts of electricity imports. The amount is equivalent to about 1.5 percent of Singapore’s demand.

Under the proposal, electricity imports could begin as early as the end of 2021 via the existing interconnector between Singapore and Malaysia.

Does Singapore import electricity? 

More than 95 percent of its electricity is generated from imported natural gas, of which the majority is from Malaysia and Indonesia.

EMA said: “To meet our climate change commitments, there is a need to change the way Singapore produces and uses energy. Tapping regional power grids for cleaner energy resources is one strategy to further diversify Singapore’s energy supply.”

The statutory board added that the trial aims to assess and refine the technical and regulatory frameworks for importing electricity into Singapore to help facilitate larger-scale imports from the region in the future.

An importer will be selected through an open and competitive selection process. Potential importers will have to demonstrate, among other things, their track record, their ability to secure demand from Singapore consumers, and how they manage the carbon output of generation supply.

Foreman control loading Containers box from Cargo freight ship for import export, foreman control Industrial Container Cargo freight ship. Logistic concept.

Malaysia’s total trade was 4.6% lower on a y/y basis.

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Malaysia’s total trade, exports, and imports go lower than expected in August, while the trade surplus expanded, show data revealed by the portal TODAY ONLINE.

The country’s trade surplus stretched 19.7% on a year-on-year (y-o-y) basis to RM13.23bil in August as higher exports of electrical and electronic (E&E) and rubber products cushioned the decline in overall exports.

Exports fell 2.9% y-o-y to RM79.14bil, according to the Ministry of International Trade and Industry (MITI), which underperformed the median estimate of a 4.9% expansion by a Bloomberg survey of economists.

Meanwhile, imports fell by a steeper margin of 6.5% y-o-y to RM65.29bil.

Total trade for the month was RM145.06bil, 4.6% lower as compared to August 2019.

“On a month-on-month basis, total trade, exports and imports contracted by 9.3%, 14.5%, and 2.2%, respectively. Trade surplus dipped by 47.5%,” said MITI.

Lower trade was recorded with Thailand, Bangladesh, Indonesia, and Japan while higher trade was registered with the US, China, and Saudi Arabia.

Total trade on the eight previous months

Between January and August 2020, Malaysia’s trade surplus rose 2.9% to RM102.98bil as compared to the same period last year.

Over the eight months, total trade fell 6.5% with exports sliding 5.8% to RM620.64bil and imports contracting 7.3% to RM517.66bil.

On a segmental basis in August, exports slipped following a 0.1% marginal decline in the exports of manufactured goods to RM68.57bil, mainly owing to lower exports of manufactures of metal and chemicals and chemical products.

However, the exports of E&E and rubber products rose 7.6% and 66.8% respectively to cushion the contraction.

There was also a 4.5% drop in agriculture food exports to RM5.71bil on the back of lower exports of sawn timber and molding as well as natural rubber.

This in turn was partially offset by the increase in exports of palm oil and palm oil-based agricultural products.

The mining goods segment however registered a steep 25.9% drop in exports to RM4.55bil, mainly on the lower demand for liquefied natural gas.

“Compared to July 2020, exports of manufactured, agriculture and mining goods declined by 15.3%, 13%, and 2.7%, respectively,” said MITI.

Meanwhile, the contraction in imports was underpinned by lower imports of intermediate goods and capital goods, cushioned by an increase in imports of consumption goods