Export growth may normalise at 8-15pc

KUALA LUMPUR: Malaysia’s export growth is likely to normalise at 8.0 to 15 per cent this year, say economists.

The projection comes after data showed yesterday that exports grew by 10 per cent in June, lower than market expectations.

The International Trade and Industry Ministry said imports grew 3.7 per cent in the month and trade surplus was at RM9.88 billion.

Compared with May, total trade, exports and imports were lower by 11.1, 8.0 and 14.5 per cent, respectively.

For the second quarter, exports rose 20.6 per cent from the same period last year and imports increased 19.1 per cent.

The ministry said for the first half, exports grew 21 per cent to RM451.05 billion and imports expanded by 23.3 per cent to RM408.12 billion.

But research houses said the slower growth pace in June was not a major cause for concern as it was a shorter working month and there were plant shutdowns for maintenance repairs.

MIDF Research had expected the slowdown in export growth due to high-base effects.

“June’s export number is 10 per cent higher year-on-year by 1.8 per cent points from our 11.8 per cent estimated growth.”

The firm kept its 2017 forecast at 14.5 per cent.

Alliance Bank said electrical and electronics (E&E), and oil and gas sectors, which had contributed 5.8 and 2.0 per cent to the June data, respectively, remained expansionary with double-digit year-on-year growth for the eighth consecutive month.

“We expect the E&E sub-sector to remain the main driver of export growth,” it said, adding that the World Semiconductor Trade Statistics had projected the semiconductor market to grow 11.5 per cent this year.

However, the June Nikkei Purchasing Managers’ Index fell to its all-time low of 46.9 and this may be seen as a headwind for the manufacturing sector in the upcoming months, the bank said.

“We expect export growth to normalise in the second half to 8.0 to 9.0 per cent,” it said.

UOB Bank economist Julia Goh said although June’s growth was the slowest in six months, this was likely due to the Hari Raya holiday. “Malaysia’s export performance was generally in line with region,” it said.

It expects export growth to moderate in the second half amid ebbing momentum in Asia’s manufacturing activity, ending of the current electronics cycle with next wave of smartphone launches later this year, and lower commodity prices.

Export growth is expected to average 7.4 per cent in the second half, bringing full-year growth to 14.2 per cent. Rupa Damodaran