Malaysia's July industrial output rose 4.6 percent from a year ago and was up 6.6 percent from June, the Statistics Department said today, with the figures positive but well below forecasts.

In July, manufacturing sector output rose 5.7 percent from a year earlier, and electricity output was up 3.4 percent but mining fell 0.4 percent, it said.

The month-on-month rise in July industrial output reflected an 8.5 percent gain in manufacturing and 2.8 percent in electricity while mining was down 0.6 percent, it said.

The Statistics Department offered no commentary on the July figures but economists noted industrial output figures for June had been revised upwards.

"The figures for July fall far below expectations," said Azrul Azwar, economist with MIDF SISMA Securities, who had been forecasting a 6.3 percent increase.

"It could be due to the surprising contraction in the mining sector," he said, noting that these figures may have been distorted by a high base comparison with last year, he said.

Consistent growth

Azrul said the growth rate seemed "consistent" with July export figures which fell 1.1 percent year-on-year, adding that he is maintaining his overall growth forecast of 4.5 percent for the economy this year, which is also the government's target.

June's industrial output rose 9.2 percent year-on-year, revised up from the original gain of 8.6 percent, while the month-on-month figure was revised to a fall of 7.5 percent from 8.1 percent, Azrul said.

The revision reflected the improved performance of the manufacturing sector, which rose a revised 9.5 percent compared with the initial 8.7 percent, he said.

For the seven months to July, the Statistics Department said industrial output was up 7.5 percent from a year ago, supported by growth in all sectors.

Prime Minister Dr Mahathir Mohamad, who is also finance minister, has said Malaysia can achieve its growth target of 4.5 percent this year despite the recent Severe Acute Respiratory Syndrome (Sars) crisis.

The govenment announced a RM7.3 billion economic stimulus package in May to soften the blow of Sars on business.

Mahathir is due to present his last national budget today ahead of his retirement next month. - AFP