Weak exports of agriculture products cushioned by exports of E&E goods

Malaysia’s export growth continued to slow from 18.7% yoy in October to 14.4% in November, slightly lower than market expectations of 14.5%. Exports of palm oil and palm-oil-based products declined by 5.2% yoy in November from a positive growth of 7.9% in October. This was attributed to lower average unit value and volume during the month. The slowdown in exports growth was also attributed to weak demand for mining goods. In particular, exports of crude petroleum contracted by 3.1% yoy in November, after rising sharply to 62.9% in October, partly due to higher base in the corresponding period of 2016.

Likewise, exports of refined petroleum products also slowed by 1.2% yoy in November (22.1% in October). However, exports of liquefied natural gas (LNG) expanded by 7.5% yoy in November (6.3% in October) due to higher exports volume during the month. As for demand for manufactured goods, exports of electronics and electrical (E&E) products, which account for 38% of total exports, increased significantly to 21.0% yoy in November, after showing some signs of slowing down beginning from August 2017. This was reflected in higher exports of parts & accessories for office machines (1.1% vs -20.4% yoy in October), telecommunications equipment, parts & accessories (2.4% vs -1.6% yoy in October), as well as thermionic valves & tubes and photocells (32.2% vs 28.9% yoy in October), which offset the decline of exports growth in electrical apparatus and parts.

According to the Semiconductor Industry Association (SIA), global semiconductor sales rose steadily by 21.5% yoy in November (21.9% yoy in October), and is targeted to likely breach the US$400bn mark by end-2017, its highest value in history. The sustained growth was led by higher sales in memory products, with all major countries continue to post double-digit growth during the month, with US posted the highest growth of 40.3% yoy, followed by Europe (19.1%) and China (18.5%).

Source: Affin Hwang Research - 8 Jan 2018