The country's manufacturing sales rose 7.4 percent in June from a year earlier to RM27.7 billion and 3.0 percent from May, helped by strong semiconductor exports, the Statistics Department said today.

For the first half of the year, manufacturing sales surged 10.2 percent year-on-year to RM162.50 billion, according to preliminary figures released by the department.

The department has also revised upwards May manufacturing sales from RM26.4 billion to RM26.9 billion, up 7.2 percent year-on-year and 2.7 percent higher than April.

Narrowing gap

Economists said the manufacturing sector, the mainstay of the economy, has been benefiting from strong global semiconductor sales amid an upturn in the US economy.

"The gap between sales and output is narrowing. This is healthy progress because production was very high in April and May and there was concern that slow sales could lead to a high inventory build-up," said Azrul Azwar, economist with MIDF Sisma Securities.

He said Malaysia's electronics and electrical exports had recorded year-on-year contractions since December.

But exports of semiconductors, which account for more than 40 percent of electronics and electrical exports, enjoyed double-digit growth in the past few months and are expected to remain buoyant amid further improvement in major export markets, he said.

Paul Schymyck, economist with Singapore-based IDEAglobal, said Malaysia's manufacturing sector had not been as badly hit by the Severe Acute Respiratory Syndrome (Sars) outbreak as compared to Singapore or Taiwan.

"The numbers indicated that the manufacturing sector is expanding quite well. We should see stronger growth in the second half of the year," Schymyck said.

Rising wages

Effects from the government's RM7.3 billion economic stimulus package unveiled in May should trickle down to boost growth and Schymyck believed Malaysia could achieve its targeted 4.5 percent growth this year.

The department said a total of 984,316 persons were employed in the manufacturing sector as of end-June, up 0.2 percent year-on-year but down 0.2 percent from May.

Total salaries and wages rose 3.3 percent year-on-year to RM1.57 billion in June and was up 1.3 percent from May, it said. In the first six months, total salaries and wages rose 5.8 percent year-on-year to 9.34 billion. - AFP