• Distributive trade sales declined 2.3% yoy

• Wholesale and Retail trade recorded a lower drop

• Retail sales supported by pent-up demand globally

• Retail sales to grow amid pandemic recovery continues

Malaysia’s distributive trade recorded RM111.4bn in August with a growth of -2.3% yoy from -3.5% in July. Although distributive trade declined for the fifth consecutive month, this was the highest sales value since the implementation of Movement Control Order due to COVID-19.

Motor vehicles grew positively for two consecutive months to record 1.0% yoy or an increase of RM0.1bn. This increase was driven by sale of motor vehicles which registered a growth of 3.1% and sale, maintenance & repair of motorcycles 2.4%. A total of 52,800 vehicles were delivered in August (-8% mom, +3% yoy). YoY growth was driven by the SST exemption sales which started mid-June, and will last up to December 2020. Whereas, the MoM drop was due to the clearance of backlog orders in July 2020 and short working month in August 2020 from a few festive holidays.

Wholesale trade generated sales value of RM51.9bn in August, a decrease of RM2.1bn (-3.9%) as against August 2019. Other specialised wholesale and wholesale on a fee or contract basis recorded a fall of 13.5% yoy and 6.2% yoy respectively. Sales of retail trade registered a negative growth of 1.5% yoy. Among groups that contributed to this fall were retail sale of cultural & recreation goods in specialised stores (Aug: -9.7%; Jul: -10.5%; Jun: -18.7%; May: -27.8%; Apr: -53.2%), retail sale of other goods in specialised stores (Aug: -7.2%; Jul: -10.8%; Jun: -17.1%; May: -28.0%; Apr: -56.8%), and retail sale of automotive fuel in specialised stores (Aug: -5.6%; Jul: -7.6%; Jun: -15.8%; May: -27.2%; Apr: -56.3%).

On monthly basis, sales value of Wholesale & Retail Trade grew 2.5% in August, contributed mainly by the wholesale trade sub-sector. The wholesale trade sub sector, which contributed the most to the increase of Malaysia’s sales, rose 3.7% to RM51.9bn, followed by retail trade, which increased 7.1% to RM45.8bn. However, sales of motor vehicle declined 0.7% to RM13.8bn.

Source: BIMB Securities Research - 13 Oct 2020