KUALA LUMPUR, Nov 8 — RHB Investment Bank Bhd (RHB IB) expects Malaysia’s industrial production to ease gradually in the fourth quarter (Q4 2022) before a more significant slowdown in the first half of 2023 (1H23).

The investment bank said its cautious outlook was driven by the ongoing slowdown in global growth and the impact of tightening financial conditions, "which should weigh on the country’s trade and manufacturing performance in early 2023.”

"Dragged by sluggish global market conditions and muted customer demand, the S&P Global Malaysia manufacturing purchasing managers’ Index (PMI) dropped further to 48.7 points in October versus 49.1 points in September on slower export orders.

"We project the full-year industrial production growth at 7.3 per cent year-on-year (y-o-y) for 2022,” it said in a research note.

RHB IB is not expecting any significant weakening of labour market conditions in the second half of 2022, although some weakness might materialise in 1H23 amid a gloomier manufacturing sector outlook.

"Moving into 1H23, the unemployment rate is likely to peak at around 4.1 per cent in the second quarter of 2023 (Q2 2023), before improving to 3.8 per cent by the fourth quarter of 2023.

"For 2022, we expect the unemployment rate at 3.8 per cent by end-2022,” it said.

Earlier today, the Department of Statistics Malaysia (DOSM) announced that Malaysia’s industrial production index (IPI) expanded 10.8 per cent y-o-y in September 2022 compared with a growth of 13.6 per cent in August. — Bernama