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Surprise jump in Malaysia's June exports

Publication Date : 09-08-2012


Malaysia's exports for June rose 5.4 per cent to 60.97 billion ringgit (US$19.67 billion) 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 per cent gain in exports following a 6.7 per cent surge in May. However, imports unexpectedly slowed to a 3.6 per cent growth against median expectations of an 8.8 per cent rise. They rose 16.2 per cent in May.

For the first half of the year, exports rose 4.2 per cent to 351.21 billionr ringgit while imports grew by 8 per cent to 300.12 billion ringgit 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-than-consensus 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-than-expected exports performance, Manokaran said real gross domestic product (GDP) might have fared better than expected.

“We're expecting slightly above 4 per cent in the second quarter, moderating from 4.7 per cent in the previous quarter,” he said.

According to the Statistics Department, E&E products, which comprised 33.6 per cent of manufactured goods exports, saw shipments rise 2.1 per cent to 20.46 billion ringgit. Overall, manufactured goods, which comprised 66.7 per cent of exports, registered a 5.8 per cent gain to 41.55 billion ringgit.

The data showed exports of mining goods rose 18.8 per cent to 11.9 billion ringgit while agricultural goods saw a 14.3 per cent contraction to 7 billion ringgit.

On imports, intermediate goods comprising 61.2 per cent of total imports, decreased 5.3 per cent to 31.68 billion ringgit. Capital goods, comprising 15.7 per cent, surged 15.5 per cent to 8.13 billion ringgit while consumption goods, comprising 7.5 per cent, rose 10.9 per cent to 3.86 billion ringgit.

Exports to the European Union, particularly semiconductor devices and crude rubber, decreased by 8.4 per cent to 5.37 billion ringgit attributable to lower shipments to France, Germany, Italy and Sweden but palm oil exports jumped 50.6 per centto 649.5 million ringgit.

Exports to the United States increased by 4.9 per cent to 5.25 billion ringgit mainly from E&E products, which expanded by 9.1 per cent.

Exports to Asean, accounting for 25.2 per cent of total exports, grew by 4.2 per cent to 15.34 billion ringgit, exports to China increased by 13.2 per cent to 8.29 billion while exports to Japan rose 24.9 per cent to 7.1 billion.

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 - the central bank of Malaysia - to maintain benchmark interest rates at 3 per cent this year with full-year GDP growth on track to hit the upper half of the official 4 per cent to 5 per cent forecast.

(US$1 = 3.0995 ringgit)


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