Surprise 5.4% rise in June exports
Despite the higher-than-expected numbers, economists say the outlook remains dim
Exports for June rose 5.4% to RM60.97bil compared with the same month a year ago on higher electrical and electronic sales to Hong Kong, the United States, Japan, Vietnam and China.
PETALING JAYA: Exports for June rose 5.4% to RM60.97bil compared with the same month a year ago on higher electrical and electronic (E&E) sales to Hong Kong, the United States, Japan, Vietnam and China.
Economists in a Bloomberg survey expected a median 3.1% gain in exports following a 6.7% surge in May. However, imports unexpectedly slowed to a 3.6% growth against median expectations of an 8.8% rise. They rose 16.2% in May.
For the first half of the year, exports rose 4.2% to RM351.21bil while imports grew by 8% to RM300.12bil with the top 10 export destinations being Singapore, China, Japan, the United States, Thailand, Australia, Hong Kong, India, Indonesia and South Korea.
Alliance Bank Malaysia Bhd chief economist Manokaran Mottain told StarBiz that despite the better-thanconsensus forecast, the outlook for exports was still dim.
“We’re still bearish on the exports outlook, as suggested by the poor purchasing managers index data in our major export destinations,” he said. Going by the better-thanexpected exports performance, Manokaran said real gross domestic product (GDP) might have fared better than expected.
“We’re expecting slightly above 4% in the second quarter, moderating from 4.7% in the previous quarter,” he said.
According to the Statistics Department, E&E products, which comprised 33.6% of manufactured goods exports, saw shipments rise 2.1% to RM20.46bil. Overall, manufactured goods, which comprised 66.7% of exports, registered a 5.8% gain to RM41.55bil.
The data showed exports of mining goods rose 18.8% to RM11.9bil while agricultural goods saw a 14.3% contraction to RM7bil.
On imports, intermediate goods comprising 61.2% of total imports, decreased 5.3% to RM31.68bil. Capital goods, comprising 15.7%, surged 15.5% to RM8.13bil while consumption goods, comprising 7.5%, rose 10.9% to RM3.86bil.
Exports to the European Union, particularly semiconductor devices and crude rubber, decreased by 8.4% to RM5.37bil attributable to lower shipments to France, Germany, Italy and Sweden but palm oil exports jumped 50.6% to RM649.5mil.
Exports to the United States increased by 4.9% to RM5.25bil mainly from E&E products, which expanded by 9.1%.
Exports to Asean, accounting for 25.2% of total exports, grew by 4.2% to RM15.34bil, exports to China increased by 13.2% to RM8.29bil while exports to Japan rose 24.9% to RM7.1bil.
Citigroup Inc senior economist Kit Wei Zheng said, in a report following the release of the external trade data, that the sustainability of E&E exports remained in question.
“While E&E seems to be the main exports driver, momentum appears to be slowing in June consistent with the signs provided by leading indicators. Out of 10 indicators that we tracked (six of which were US indicators, and four from Asia), only three saw month-on-month increases in June, compared to six or seven categories in previous months,” he said.
Kit said for July, only two of four indicators saw an expansion with slowing palm oil exports due to lower crude palm oil prices and export volumes.
He said the import slowdown was likely a technical pullback after the surge in May’s imports rather than a reversal of the underlying trend of robust domestic demand and lacklustre exports.
“While details are not yet available, capital goods imports were exaggerated in May by the delivery of transport equipment, which may have fallen in June. Soft intermediate goods imports suggest exports weakness ahead,” Kit said.
He expected Bank Negara to maintain benchmark interest rates at 3% this year with full-year GDP growth on track to hit the upper half of the official 4% to 5% forecast.