Malaysia’s industrial production
On June 11, Malaysia’s Department of Statistics released its industrial production data for April. The industrial production index rose 4% on a year-over-year basis in April, surpassing analysts’ expectation of a 2.7% rise. All three subindexes (mining, manufacturing, and electricity) saw accelerated growth in April.
On the manufacturing side, transport equipment and other manufacturing clocked in 7.2% growth in April, while textiles, leather, and footwear saw 5.7% growth. Electrical and electronic products, which accounted for 38.7% of total exports between January and April 2019, saw handsome 4.1% growth.
On the mining side, crude oil production continued to fall, while natural gas production rose 6.1%. Electricity production in April rose 5.8% compared to the same month in 2018.
Is Malaysia winning the trade war?
While the April data doesn’t reflect the effect of President Donald Trump’s new tariffs, the Malaysian economy seems to be on a growth path in the current quarter. In fact, Nomura recently said that Malaysia could be the biggest beneficiary of trade substitutions by the US and China in the event of a prolonged tariff war. The same report suggested that Malaysia could attract factories leaving China in search of greener pastures.
The iShares MSCI Malaysia ETF (EWM) was up 0.2% as of 12:47 PM EDT today. So far in June, the ETF has gained 0.41%. However, it’s fallen 0.67% so far in 2019 amid mounting trade war concerns.