KUALA LUMPUR (Dec 27): Malaysia’s producer price index (PPI), which measures the prices of goods at the factory gates, has slipped further in November 2023 with a 1.5% year-on-year (y-o-y) decline, after a marginal decrease of 0.3% in October 2023, the Department of Statistics Malaysia (DOSM) reported on Wednesday.
Notably, Malaysia's PPI recorded positive y-o-y growth only during the months of January and September so far this year.
Chief statistician Datuk Seri Dr Mohd Uzir Mahidin said the decrease in November 2023 was attributed to the decline in all sectors except for the water supply sector, which increased by 1% during the month.
Based on the monthly data provided by DOSM, it can be observed that the mining sector decreased by 4.7% y-o-y as compared with 0.5% in the previous month while the manufacturing sector continued to drop by 1.4% against 0.7% in October 2023.
At the same time, the agriculture, forestry and fishing sector decreased by 0.4%, and the electricity and gas supply sector also went down by 0.6%.
On a monthly basis, PPI local production further declined by 0.7% in November 2023 as compared to a decline of 0.3% in the previous month.
In comparison with other major countries, Mohd Uzir pointed out that the PPI of the US went up slightly to 0.9% against 1.2% in October 2023, while Japan’s PPI rose by 0.3%, slowing from an increase of 0.9% in the previous month. This was the lowest recorded since a deflation in February 2021, due to the beverages and food, and pulp, paper and related products indices.
Meanwhile, China’s producer prices continued to decline by 3.0% after a drop of 2.6% in the previous month, due to factors such as the fall in international oil prices and weak market demand for some industrial products. Taiwan’s PPI also declined further by 0.7% mainly due to gas supply, petroleum and coal product.
"The market that pushed oil prices higher in September 2023 reversed sharply in October 2023, despite continued tight crude supplies and an intensifying conflict in the Middle East. In early November, crude oil Brent plunged to a four-month low of around US$80 per barrel. The sudden sell-off was triggered by a shift in market focus from supply risks to global economic conditions and oil demand," Mohd Uzir said in a statement.
Due to relatively full natural gas supplies in the US and Europe, as well as an increase in global export and import capacity for liquefied natural gas (LNG), Mohd Uzir said energy supply is likely to remain sufficient to meet global natural gas demand for the winter months of November 2023 until March 2024.
"However, there are risks to this equilibrium, including the possibility of extreme weather events and supply disruptions. LNG futures prices remained consistently lower, largely driven by more natural gas in storage in Europe as compared to prior years," he added.