Exports rebound:
Shipments overseas expand 31% on electronics and petroleum products
A file picture showing a container being loaded onto a trailer at Westports. Malaysia’s export growth in July rebounded strongly, beating consensus estimates, after a disappointing performance in the preceding month.
PETALING JAYA: Malaysia’s export growth in July rebounded strongly, beating consensus estimates, after a disappointing performance in the preceding month.
Data from the Statistics Department yesterday showed that the country’s exports in July expanded 30.9% year-on-year (y-oy), driven by external demand for electrical and electronics and petroleum products, as well as shipments of liquefied natural gas.
This was an acceleration from the 10% y-o-y growth registered in June, and exceeded the consensus estimate of 15 economists polled by Bloomberg for a 23% y-o-y export growth in July.
The Statistics Department noted that July exports, valued at RM78.62bil, posted a stronger growth than imports for the third straight month. In July, imports grew 21.8% y-o-y to RM70.59bil, driven by intermediate and consumption goods. This compared with the 3.7% y-o-y increase in imports in the preceding month.
The trade surplus in July narrowed to RM8.03bil, less than the consensus estimate of RM7.8bil.
In June, the country’s trade surplus rose to a 15-month high of RM9.9bil.
MIDF Research in its report said the strong rebound in exports and imports in July was not surprising due to a low base effect.
“The rebound in the export and import growth is expected due to a low base effect,” the brokerage said.
“The continuous uptick in global demand, in particular manufactured goods, and an optimistic market environment are major factors contributing to the upbeat momentum in Malaysia’s external trade performance,” it added.
MIDF Research expects the continuous improvement in domestic economic activity in major economies such as China, Japan, the European Union (EU) and the United States to indirectly translate into stronger external demand for Malaysian products.
“Looking ahead, we foresee Malaysia’s external trade outlook for August to continue on the upward trend. Among others, economic developments in major economies, namely, the US, the EU and China are displaying positive signs,” it explained.
Meanwhile, JF Apex Securities expects Malaysia’s trade numbers in the months ahead to be softer.
“We expect export and import to record growth rates of 26% and 18%, respectively, in August, following a boasting performance in July.
“Besides, we believe our trade performance will continue to expand moderately, supported by strong global demand and greater output to main destinations,” the brokerage said.
Similarly, MIDF Research expects the export numbers to slow down in the second half of the year.
“Even though the export growth in July skyrocketed to above 30% y-o-y, we maintain our view that Malaysia’s exports will moderate in the second half of 2017 due to a high base effect.
“In spite of this, continuously strengthening global demand and a modest recovery in commodity prices will support our trade performance this year,” it said.
In total, Malaysia’s trade surpassed the one trillion mark in January-July 2017, with a value of RM1.008 trillion, expanding by 22.7% from the corresponding period in 2016.
“This was the fastest period trade breached the one trillion mark, two months earlier than the normal trend,” the Statistics Department said.
“Expansion was supported mainly by trade with Asean, China, the US, the EU, Japan, India and Taiwan,” it added.
For the seven-month period, exports grew 22.3% y-o-y to RM529.68bil, while imports rose 23% y-o-y to RM478.71bil, resulting in a trade surplus of RM50.97bil.