Malaysia’s export posted a strong growth of 18.9% yoy to RM82.4bn in October after moderating 14.8% yoy in September. Exports exceeded RM80bn mark for the third time in 2017. Imports rose by 20.9% to RM71.9bn. The rebound in exports and imports growths is expected due to low base effect. Trade surplus widened to RM10.6bn, the highest value since April 2016, making it the 240th consecutive month of trade surplus since November 1997.
On monthly basis, exports and imports expanded by 5.3% and 3.2%, respectively. In seasonally adjusted terms, export increased 5.0% but imports decreased 1.7%.
Total trade in October 2017 surged by 19.8% yoy to RM154.3bn and compared to previous month it posted an expansion of RM6.4b or 4.3%.
Total trade for the first ten months of 2017 amounted to RM1.5tn, grew by 21.5% compared with the same period of 2016. Exports totaled RM772.7bn, an increase of 21.1% while imports stood at RM692.5bn, rose by 21.9%. Trade surplus of RM80.2bn was recorded, higher by 14.4% yoy.
Export growth rebounded to 18.9% yoy in October due to low base effect. Apart from that, robust external trade activities are reflected during the month as proven by the strong month-on-month expansion.
Exports of manufactured goods in October 2017 increased by 19.5% yoy (Sep: 17.1%; Aug: 22.4%) or RM11.1bn to RM68.1bn, accounting for 82.6% of Malaysia’s total exports. The expansion was mainly on account of higher exports of electrical and electronic (E&E) products and petroleum products, collectively contributing 54.8% to total manufactured exports. Exports of E&E products, constituting 37.7% of total exports, increased by 16.9% yoy (Sep: 17.7%; Aug: 20.1%) or RM4.5bn to RM31.1bn. This was the tenth consecutive months where exports of E&E products recorded a double-digit growth. Shipment of petroleum product which attributed for 7.5% of total export rose by 21.4% to RM6.2bn. All major subsectors registered double digit growth in exports except for processed food and wood products.
Exports of mining goods surged by 27.3% (Sep: 6.1%) to RM6.7bn, constituting 8.1% of Malaysia’s total exports. The growth was mainly driven by increased exports of crude petroleum, which rose RM1.1bn or 62.9% (Sep: -4.9%; Aug: 0.04%) to RM2.9bn and contributed 3.5% to total exports. Exports of liquefied natural gas (LNG) grew 6.3% to RM2.9bn while shipments of refined petroleum products rose 13.4% to RM4.9bn.
Exports of agriculture goods increased by 6.3% yoy (Sep: -1.8%) to RM7.0bn, with a share of 8.5% of total exports. Exports of palm oil and palm oil-based agriculture products which grew by 7.9% to RM5.0bn were the main contributor to the expansion.
Compared to September 2017, exports of manufactured, agriculture, and mining products were up by 3.7%, 10.8% and 21.0%respectively.
During the first ten months of 2017, imports amounted to RM692.5bn, an increase of 21.9% yoy. Imports of intermediate goods totaled RM400.2bn, increased by 23.1%, capital goods valued at RM93.3bn increased by 13.7% and consumption goods valued at RM58.3bn expanded by 7.0%.
The main contributors to the growth were trade with ASEAN, China, the US, Hong Kong SAR, Japan, the European Union (EU) and Taiwan.
Exports to ASEAN recorded double-digit growth of 19.5% yoy in October (Sep: 12.7% yoy) to RM23.9bn. The rise in exports was attributed mainly to strong export performance of E&E products. Imports from ASEAN surged by 26.1% (Sep: 23.8%) to RM19.4bn. Overall, trade with ASEAN rose by 22.4% yoy to RM43.4bn, accounting for 28.1% of Malaysia’s total trade.
Trade with China increased by 18.8% yoy to RM25.0bn, making up 16.2% of Malaysia’s total trade. Exports to the country expanded by 20.5% (Sep: 27.1%) to RM11.5bn, led by higher exports of LNG, manufactures of metal, petroleum products, chemicals and chemical products, rubber products as well as crude petroleum. Exports to China in October posted stronger yearly growth compared to imports for seven consecutive months. Imports from China increased by 17.4% (Sep: 7.8%) to RM13.6bn.
Malaysia’s trade with the EU in October 2017 amounted to RM14.9bn or 9.7% of Malaysia’s total trade, an increase of 12.8% yoy. Exports to the EU expanded by 9.3% yoy (Sep: 16.2%) driven by exports of manufactured goods, particularly E&E products which rose by 14.5%. Imports grew by 17.0%.
Exports to the US grew by 13.8% yoy (Sep: 10.7%) to RM8.0bn, underpinned by expansion in exports of manufactured and agriculture goods. Imports were up by 23.0% (Sep: 19.5%) to RM5.3bn. Total trade with the US in October surged by 17.3% yoy (Sep: 14.1%) to RM13.4bn and accounted for 8.7% of Malaysia’s total trade.
Trade with Japan surged by 17.9% yoy to RM11.5bn, constituting 7.5% of Malaysia’s total trade. Exports to Japan increased by 20.4% yoy (Sep: 6.9%) to RM5.9bn, supported mainly by increased exports of manufactured goods. Mining goods also contributed to the increase in exports to Japan, particularly, LNG and crude petroleum. Imports were up by 15.4% (Sep: 10.8%) to RM5.6bn.
US October trade deficit unexpectedly widened to USD48.7bn while the September deficit was also revised higher to USD44.9bn largely because of a slowdown in exports and an increase in imports of oil and other foreign goods. Japanese exports rose 14.0% yoy, easing from a 14.1% gain in the previous month. It was the 11th consecutive increase in exports.
China's exports and import growth eased in October. Exports rose 6.9% yoy compared to 8.1% growth in the previous month whilst imports grew 17.2% yoy, slightly slower than the 18.7% rise in September. China's trade surplus narrowed sharply to USD38.2bn in October
Regionally, exports data remained strong. Thailand’s international trade continued to expand in October 2017. Exports grew by 13.1% yoy following a 12.2% increase in the previous month. Exports climbed for the eighth consecutive month on the back of strengthening external demand.
Singapore’s non-oil domestic exports (NODX) gained back some footing in October as it expanded 20.9% yoy, reversing the 1.1% yoy decline in September.
Indonesian exports grew even higher in October at 18.4% yoy to USD15.1bn, driven by the increase in the non-oil & gas exports. Imports jumped higher than that of exports at 23.3% yoy amidst higher importation of capital goods. As a result, trade surplus has narrowed in October to USD0.9bn from USD1.8bn in the preceding month.
Malaysia's exports maintained their double-digit growth momentum year-on-year in October 2017. Year-to-date exports rose 21.1% for Jan-Oct in line with the global cyclical upturn. Going forward the momentum would likely moderate in the last two months of the year. Such moderation is consistent with the slower increase in electronics orders from key economies. That said, the resilient pace of industrial activity and upbeat global demand are anticipated to continue supporting the healthy expansion of exports and imports, through the rest of this year.
Based on manufacturing conditions, global manufacturing remained resilient. Global manufacturing PMI rose to 54.0 in November, the highest reading since Mac 2011. The majority of advanced market economies enjoyed sustainable strength in the manufacturing sector. Among them, the Eurozone PMI advanced to a near record high of 60.1 in November; the US PMI registered a lower yet still elevated level of 53.9 while manufacturing conditions remain buoyant among major Asian economies. China and Japan continued to report stable above-50 reading whilst ASEAN manufacturing PMI improved further in November. Therefore, we expect global trade activities in 4Q17 to remain on an upbeat momentum albeit at a moderating rate amid of unfavorable base effects.
Even though exports growth still on robust speed, we view that Malaysia’s exports to moderate into 4Q17. However, given strong external demand and robust domestic growth, we still expect both export and import growth to remain at a double-digit pace in the coming months.
Source: BIMB Securities Research - 7 Dec 2017
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Created by kltrader | Aug 12, 2024
Created by kltrader | Aug 12, 2024