Malaysia's real GDP to pick up to 4.8 percent this year, says RHB Research

The target was also set on account of a pick-up in domestic demand as higher export growth would trickle down to an improvement in consumer spending and private investment, as well as, an expected modest increase in public spending and investment, the research house said.

In a note following the release of April's Industrial Production Index (IPI) today, it said the IPI slowed to 4.2 per cent, year-on-year (y-o-y), in April, from +4.6 per cent in March, on the back of declines in mining and electricity output.

Nevertheless, it said the April pace remained near the average of 4.3 per cent growth for the first quarter this year.

RHB Research said the slower industrial productivity in April was partly mitigated by a stronger growth in manufacturing activities.

The increase in manufacturing activities was on account of the quicker growth in the manufacture of electrical & electronic (E&E) products, food & beverages (F&B), textiles & wearing apparel and metal products but this was partly offset by a slowdown in the manufacture of transport equipment, textiles and wooden products, it said.

In the same vein, the research house said manufacturing sales gained pace, maintaining their double-digit growth pace since December 2016 with factories accelerating their hiring of workers, with the employee head count growing 2.6 per cent, y-o-y, in March, the fastest pace in more than five years.

As manufacturing sales outpaced hiring, growth in wages per employee picked up to 7.7 per cent, y-o-y, in March, it added.