MALAYSIA'S PPI HIGHER BY 1.6% IN MARCH 2024 - DOSM

Malaysia's Producer Price Index (PPI), which measures the price changes of goods at the producer level, increased by 1.6% in March 2024 compared with 0.3% in February 2024, said the Statistics Department (DoSM).

In its latest monthly report of the PPI Local Production, March 2024, DoSM's chief statistician Datuk Seri Dr Mohd Uzir Mahidin said all sectors registered an increase in March 2024, contributing to the increase of the overall index.

The mining sector inclined 8.3% (February 2024: 5.3%), due to the index of extraction of crude petroleum (11.0%).

At the same time, the agriculture, forestry and fishing sector increased by 5.5% (February 2024: 6.0%), with the index of growing of perennial crops and animal production going up by 9.0% and 3.8% respectively.

The manufacturing sector increased slightly by 0.6% from a negative 0.7% in the previous month due to the manufacture of computer, electronic and optical products (6.8%) and manufacture of chemicals and chemical products (1.4%).

“For the utility sector, the electricity and gas supply, and water supply indices both went up by 0.1% and 6.0% respectively,” he said in a statement.

On a monthly basis, PPI local production increased by 1.6% versus 0.7% in February 2024 contributed by all sectors.

The agriculture, forestry and fishing sector went up 4.3% (February 2024: 2.6%) due to growing of perennial crops (7.4%) and animal production (1.0%) indices.

The mining sector rose by 2.3% (February 2024: 5.7%) attributed to the extraction of crude petroleum (2.3%).

Mohd Uzir also said PPI local production recorded an increase of 0.4% in the first quarter (1Q) of 2024 after a decrease of 1.0% in the fourth quarter of 2023.

The agriculture, forestry and fisheries sector went up by 4.9%, followed by mining and water supply sectors, which increased by 4.0% and 3.4% respectively.

However, manufacturing and electricity and gas supply both posted a decline of 0.3% and negative 0.2% respectively.

"Meanwhile, quarter-on-quarter showed the PPI inched up 0.6% against negative 0.3% in the 4Q of 2023," said Mohd Uzir.

A comparison of selected countries showed that, the PPI of the United States (US) increased by 2.1% in March as against 1.6% in February 2024.

Besides, the United Kingdom's (UK) annual inflation rate rose by 0.6%, up from 0.4% in February 2024 due to refined petroleum products and other outputs.

Japan's PPI edged up 0.8% from a 0.7% rise in the prior month.

"China's producer price continued to shrink 2.8% compared to a 2.7% drop in the previous month.

"This marked the 18th consecutive month of contraction in factory gate prices since last November, highlighting persistently weak demand as the economy needed fresh stimulus, linked to further drops in mining and quarrying and raw materials," he said.

Mohd Uzir further said that Malaysian property prices are anticipated to grow significantly in the first half of 2024 (1H 2024) due to the challenges of rising cost of building materials, based on the Real Estate and Housing Developers' Association (Rehda)'s Market Outlook for 2024.

According to Rehda, as of December 2023, the average price of sand and concrete in Malaysia had increased by more than 10% year-on-year.

This translated into construction cost that is expected to increase on average by 15% during 1H 2024.