PETALING JAYA: Malaysia’s exports rose 6.3% to RM67.6bil last November compared with the same month in 2014 on a rise in refined petroleum products and higher crude palm oil shipments.
However, November exports came in lower than economists’ expectations of a median 12% gain in a Bloomberg survey and a contrast to October exports, which had jumped 16.7%.
Alliance Research chief economist Manokaran Mottain blamed the marginal increase in electrical and electronic (E&E) shipments for the exports performance. E&E exports only rose 0.6% year-on-year.
Manokaran said in a report that higher E&E shipments had been cushioning the slump in commodity exports but E&E exports contracted by 12% in November on a month-on-month basis compared to a 0.6% increase in October.
“This is reflective of the challenging domestic manufacturing sector. Malaysia’s manufacturing purchasing managers index has been in contractionary territory since the second quarter of last year as production and new orders continue to fall,” he pointed out.
Manokaran remains wary of downside risks to global demand despite a weaker ringgit providing some support to exporters via foreign currency gains. He said for the year to November, exports and imports growth had been tepid, at 1.9% and 0.1% respectively.
“While base effect could result in higher percentage year-on-year exports growth in the first-half of this year, the underlying weaknesses of depressed commodity prices and subdued global macro continue to pose downside risks to trade performance,” Manokaran added.
According to the Statistics Department data, imports increased by 9.1% year-on-year to RM57.4bil. Month-on-month, exports shrunk 10.8% while imports contracted 9.8%. Total trade gained 7.6% to RM125bil in November compared with the same month in 2014 but registered a 10.4% decrease month-on-month.
Meanwhile, Citigroup Inc economist Kit Wei Zheng said the current account surplus may narrow to between 2% and 2.5% of gross domestic product. “In US dollar terms, the trade surplus fell to US$2.37bil, from US$2.85bil in November,” he said, adding that the RM1.9bil fall in the trade balance on a month-on-month basis was led by natural gas, E&E and palm oil.
“We were expecting a renewed fall in liquefied natural gas (LNG) prices, which has materialised and is likely to persist, in our view. “More broadly, external demand will likely soften in 2016, which may moderate gains in manufactured exports (though still outperforming commodities),” Kit noted, adding that LNG exports also fell with average unit value falling for the first time in six months, reflecting the lagged impact of renewed crude oil price declines in July.
