MARKET DEVELOPMENT
Robust Growth in May Exports
Robust Growth in May Exports
10/07/2017 (New Straits Times) - Malaysia's exports grew 32.5 per cent in May, significantly above expectations and the highest for a month in seven years.
This was led by strong demand for Malaysian-manufactured goods, palm oil and crude petroleum.
The growth pace beat the 21.3 per cent forecast by a Reuters poll and April's 20.6 per cent growth.
Export growth outpaced import growth for the first time since May last year, data from the International Trade and Industry Ministry (Miti) showed.
The ministry yesterday said total trade expanded by 31.5 per cent at RM153.3 billion.
Imports increased by 30.4 per cent, resulting in a trade surplus of RM5.49 billion.
On a month-on-month basis, total trade, exports and imports expanded by 10.2 per cent, 7.5 per cent and 13.3 per cent, respectively.
Double-digit growth was seen across all sectors, led by the manufacturing sector, due to increased exports of electrical and electronic (E&E) products, petroleum products, chemical products, rubber products, iron and steel products, and machinery.
Higher palm oil exports and crude petroleum also pushed to a 24.5 per cent growth in agriculture goods and mining exports to climb 32 per cent.
UOB Bank economist Julia Goh said the May exports growth pace marked the highest since March 2010.
She said the high growth was partly due to a low base effect.
Alliance Bank has raised the growth forecast from 4.8 per cent to five per cent in view of the recent strength in economic activities.
“Cumulatively, exports had registered 23.3 per cent growth in the first five months of the year, while imports were up 27.7 per cent during the period, suggesting sustainable export activities, at least in the short-term.”
The bank expects the strong exports growth to lead to a spillover effect to other parts of the economy, especially export– oriented industries such as the E&E sub-sector of the manufacturing sector.
The weak ringgit exchange rate also played a role in the double-digit export trend, exports volume growth and expansion over the past five months.
“Demand for our exports from the United States, and especially China — key export trading markets (collectively around 24 per cent of total exports) — has been improving since the second half of the year, after exports to China posted consecutive negative growth since early 2015.”
It, however, cautioned about the recent 46.9 level recorded by June purchasing managers’ index data — which is a proxy for the manufacturing sector over the next six months.
“As long as global demand for Malaysian manufactured goods persists, the strong export growth trend could be sustainable, albeit at a slower pace, throughout 2017.”
Private consumption remains resilient, supported by a number of consumption indicators, including retail and vehicle sales — pointing to an expansionary outlook.
Meanwhile, Miti said exports attained double-digit growth to all Asean countries.
China, Malaysia’s biggest trading partner, also imported the highest year-on-year number with a 51 per cent surge in exports due to greater demand for E&E products, petroleum products, chemicals and chemical products as well as rubber products.
Exports to the European Union expanded by 29.7 per cent while exports to the US surged by 16.3 per cent.
This was led by strong demand for Malaysian-manufactured goods, palm oil and crude petroleum.
The growth pace beat the 21.3 per cent forecast by a Reuters poll and April's 20.6 per cent growth.
Export growth outpaced import growth for the first time since May last year, data from the International Trade and Industry Ministry (Miti) showed.
The ministry yesterday said total trade expanded by 31.5 per cent at RM153.3 billion.
Imports increased by 30.4 per cent, resulting in a trade surplus of RM5.49 billion.
On a month-on-month basis, total trade, exports and imports expanded by 10.2 per cent, 7.5 per cent and 13.3 per cent, respectively.
Double-digit growth was seen across all sectors, led by the manufacturing sector, due to increased exports of electrical and electronic (E&E) products, petroleum products, chemical products, rubber products, iron and steel products, and machinery.
Higher palm oil exports and crude petroleum also pushed to a 24.5 per cent growth in agriculture goods and mining exports to climb 32 per cent.
UOB Bank economist Julia Goh said the May exports growth pace marked the highest since March 2010.
She said the high growth was partly due to a low base effect.
Alliance Bank has raised the growth forecast from 4.8 per cent to five per cent in view of the recent strength in economic activities.
“Cumulatively, exports had registered 23.3 per cent growth in the first five months of the year, while imports were up 27.7 per cent during the period, suggesting sustainable export activities, at least in the short-term.”
The bank expects the strong exports growth to lead to a spillover effect to other parts of the economy, especially export– oriented industries such as the E&E sub-sector of the manufacturing sector.
The weak ringgit exchange rate also played a role in the double-digit export trend, exports volume growth and expansion over the past five months.
“Demand for our exports from the United States, and especially China — key export trading markets (collectively around 24 per cent of total exports) — has been improving since the second half of the year, after exports to China posted consecutive negative growth since early 2015.”
It, however, cautioned about the recent 46.9 level recorded by June purchasing managers’ index data — which is a proxy for the manufacturing sector over the next six months.
“As long as global demand for Malaysian manufactured goods persists, the strong export growth trend could be sustainable, albeit at a slower pace, throughout 2017.”
Private consumption remains resilient, supported by a number of consumption indicators, including retail and vehicle sales — pointing to an expansionary outlook.
Meanwhile, Miti said exports attained double-digit growth to all Asean countries.
China, Malaysia’s biggest trading partner, also imported the highest year-on-year number with a 51 per cent surge in exports due to greater demand for E&E products, petroleum products, chemicals and chemical products as well as rubber products.
Exports to the European Union expanded by 29.7 per cent while exports to the US surged by 16.3 per cent.