27-7-2023 (KUALA LUMPUR) Malaysia’s Producer Price Index (PPI) continued its downward trend, registering a decline of -4.8 per cent year-on-year (y-o-y) in June 2023, compared to -4.6 per cent in May, as reported by the Department of Statistics Malaysia (DoSM) today.
The PPI serves as a gauge for measuring the prices of goods at the factory gate.
According to Datuk Seri Mohd Uzir Mahidin, Chief Statistician of Malaysia, the agriculture, forestry, and fishing sector has been facing a continuous decline for six consecutive months in 2023, with a notable drop of -20.4 per cent in June (compared to -27.2 per cent in May).
This decline was primarily attributed to the significant decrease in the oil palm fresh fruit bunches (FFB) index, which stood at -34.4 per cent in June 2023.
“The mining sector also experienced a downturn of -16.6 per cent (compared to -10.7 per cent in May), largely influenced by the fall in the extraction of crude petroleum index (-23.3 per cent),” stated Mohd Uzir in an official statement.
Furthermore, the manufacturing sector witnessed a decrease of -1.8 per cent, where the manufacture of food products index fell by -9.9 per cent.
“However, there was a positive development in the manufacture of computer, electronic, and optical products index, which rose by 7.5 per cent, contributing to the marginal movement in the manufacturing sector,” added Mohd Uzir.
He highlighted that the utility sector saw an increase of 3.2 per cent in the water supply indices, while the electricity and gas supply indices also widened by 1.0 per cent.
Looking at the monthly figures, PPI local production experienced a slight dip of -0.3 per cent in June 2023 (compared to -0.4 per cent in May).
Commenting on the stage of processing, Mohd Uzir revealed that the crude materials for further processing index continued to decline by -18.7 per cent in June 2023 (compared to -20.1 per cent in May), with the non-food materials index posting a significant drop of -22.9 per cent.
“The intermediate materials, supplies, and components index also recorded a decline of -2.8 per cent due to decreases in the index of materials and components for manufacturing (-6.6 per cent), as well as processed fuel and lubricants (-3.3 per cent). However, the finished goods index edged up by 3.3 per cent, mainly due to increases in capital equipment (4.4 per cent) and finished consumer goods (2.0 per cent),” explained Mohd Uzir.
Meanwhile, for the first half of 2023, Malaysia’s PPI fell by -2.5 per cent compared to the same period last year. This decline was largely attributed to the continuous low pace drop in major commodities such as crude oil, natural gas, and crude palm oil since January 2023.
