MALAYSIA’S local production producer price index (PPI), which measures the costs of goods at the factory gate, remained high last month with a growth of 11.2% year-on-year (y-o-y) compared with 11.0% y-o-y in April, the Statistics Department said. 

Chief statistician Dr Mohd Uzir Mahidin attributed the growth to the mining index, which increased 20.6% y-o-y against 18.4% y-o-y in April.

He said the agriculture, forestry and fishing index grew by 16.7% y-o-y, mainly led by an increase in the indices of growing of perennial crops (21.2%), fishing (11.3%) and growing of non-perennial crops (7.8%).

“The manufacturing index registered a double-digit increase of 10.1% for the first time since August 2011, underpinned by an increase in indices of sub-sectors, namely manufacture of vegetable and animal oils and fats (24.5%), manufacture of refined petroleum products (22.9%) and manufacture of basic chemicals, fertilisers and nitrogen compounds, plastics and synthetic rubber in primary forms (13.3%).

“In addition, the indices of water supply increased 1.2%, while that of electricity and gas supply decreased 0.6%,” he said in a statement today.

On a month-on-month basis, Uzir said the local production PPI increased 1.2% versus 0.2% recorded in the previous month.

He said the growth was supported by the mining index, which rose 4.0%, driven by the rise in the indices of crude oil (4.3%) and natural gas (3.1%).

Meanwhile, the manufacturing index increased by 1.0% due to the growth in indices of sub-sectors, namely manufacture of vegetable and animal oils and fats (2.6%), refined petroleum products (1.3%) and consumer electronics (1.1%), he said.

“The double-digit increase in PPI in Malaysia was in line with the rise in inflation at the producer level for selected countries, which were affected by supply shortages, mainly of raw materials due to the lockdown ease, opening of the economy as well as the war between Russia and Ukraine,” he said.

Uzir said inflation at the producer level for the United Kingdom rose 15.7% last month from the 14.7% recorded in April, driven by higher prices for fuel and raw materials, which jumped more than 22.0% annually.

Similarly, he said, rising prices of gasoline and energy products contributed to a 10.8% rise in inflation at the producer level for the United States in May.

A similar situation was seen in Southeast Asian countries such as Thailand, where its producer-level inflation recorded a 13.3% surge in May (April: 12.8%), which was contributed by increases in the manufacturing and mining sectors, he added. – Bernama, June 28, 2022.