March 6 (Bloomberg) -- Malaysia's industrial production probably grew at the fastest pace in 13 months in January as manufacturers raised output ahead of Lunar New Year holidays and mining increased.

Output at factories, utilities and mines rose 5.9 percent from a year earlier, after gaining 5.7 percent in December, according to the median estimate of 18 economists in a Bloomberg News survey. The Putrajaya-based Statistics Department will release the figure at 12:01 p.m. tomorrow.

"External trade and industrial production benefited from a ramp up in activities as producers and exporters rushed to meet local and overseas demand ahead of the Chinese New Year holidays,'' said Suhaimi Ilias, an economist at Aseambankers Malaysia Bhd. "Moreover, there are indications of higher or sustained domestic production.''

Rising domestic demand and record commodities prices have benefited Malaysia, helping counter weakening demand for the country's semiconductors and other electronics goods amid faltering growth in the U.S., its biggest overseas market. Some manufacturers boost production before shutting plants for the Lunar New Year, which fell in early February this year.

Southeast Asia's third-largest economy grew 7.3 percent in the fourth quarter, the fastest pace in more than three years. Growth in the $149 billion economy accelerated to a three-year high of 6.3 percent in 2007.

'Substantial Boost'

Soaring crude and palm oil prices should provide a "substantial boost to mining and part of the manufacturing sector,'' said Irvin Seah, an economist at DBS Group Holdings Ltd. in Singapore. Crude oil prices have almost tripled in the past five years, reaching a record $103.95 a barrel on March 3. Palm oil reached an unprecedented 4,486 ringgit a ton on March 4.

Malaysia's agriculture output expanded 6.9 percent in the fourth quarter, accelerating from a 0.7 percent increase in the previous three months, after palm oil production gained. Mining grew 3.5 percent, up from 2.3 percent, as new deepwater fields bolstered oil output. The country is Southeast Asia's No. 2 producer of palm oil, petroleum and gas.

Production of vehicles, oil and natural gas increased further in January, said Suhaimi of Aseambankers.

Manufacturing by companies including computer chip assembler Unisem (M) Bhd. and carmaker Proton Holdings Bhd. accounts for more than 30 percent of Malaysia's economy. Manufactured goods make up almost four-fifths of the nation's overseas sales.

The following is a table of economists' estimates for Malaysia,s January industrial production growth.

source: bloomberg