Sharp Slowdown in Exports of Mining Goods

Malaysia’s exports growth slowed from 21.6% yoy in August to 14.8% in September, lower than market expectations of 20%. This was attributed mainly from the sharp slowdown in exports of mining goods. In particular, exports of crude petroleum contracted to 4.9% yoy in September after remaining flat in August, due to lower export volume during the month. Meanwhile, exports of liquefied natural gas slowed sharply from 101.8% yoy in August to 8.2% in September.

Similarly, in the agriculture sector, exports of palm oil and palm-oil based products declined by 1.7% yoy in September, the second consecutive months of negative growth, dragged down by lower demand of palm-oil based oleochemical. Meanwhile, rubber products expanded by 19.4% yoy in September, albeit lower than the previous month due to lower average unit value.

As for exports of manufactured goods, exports of electronics and electrical (E&E) products, which account for 39.4% of total exports, remained healthy, expanding by 17.7% yoy in September, albeit slower than 20.1% in the previous month. The slowdown was underpinned by lower demand for parts & accessories for office machines (-24.1%), electrical apparatus and parts (-6.3%), as well as telecommunications equipment, parts & accessories (11.3%). This was also in tandem with the global semiconductor sales, which slowed slightly by 22.2% yoy during the month (23.9% yoy in August), on lower demand from China and Japan.

Likewise, exports of optical/ scientific equipment also slowed by 14.5%, while chemicals/ chemicals products slowed further by 2.9% yoy during the month. Other components, including machinery/ appliances as well as manufactures of metal rose slightly by 7.3% and 25.4% respectively.

Source: Affin Hwang Research - 6 Nov 2017