• Distributive trade sales growth slowed to 3.8% YoY (Aug: 4.7%), marking the lowest since December 2021 and the lowest growth recorded this year as economic activity normalise
• MoM growth contracted (-0.7%; Aug: 0.1%) mainly due to weak motor vehicle sales.
• Sales value (RM148.2b; Aug: RM149.0b): decline, after reaching a new record high the previous month.
• 3Q24 (5.1%; 2Q24: 6.4%): growth moderated, reflecting a slower sale during the quarter.
• Weak motor vehicle sales and moderate growth in wholesale and retail sales
• Motor vehicles (-1.0%; Aug: 4.1%): fell due to weak motor vehicle sales (-10.3%; Aug: -0.5%), in line with lower unit sales (58.0k units; Aug: 71.2k) during the month due to temporary factory closure. Nevertheless, higher growth in the sale of maintenance & repair (20.6%; Aug: 16.2%) partially mitigated the slowdown.
• Wholesale trade (3.6%; Aug: 3.7%): moderated slightly, impacted by a larger decline in other specialised (-2.6%; Aug: -1.4%) and a sharp slowdown in agriculture, raw material & live animals (4.0%; Aug: 7.8%). However, higher growth in machines, equipment & supplies (9.6%; Aug: 7.2%) partially offset the slowdown.
• Retail trade (5.5%; Aug: 5.9%): growth moderated to a five-month low due to a slowdown in non-specialised stores (6.2%; Aug: 7.8%) with its contribution to overall growth decline to 1.0 ppts (Aug: 1.3 ppts). However, higher growth in automotive fuel (6.7%; Aug: 5.3%) and stalls & markets (7.9%; Aug: 5.6%) offered partial relief.
• Mixed performance of retail sales across regional economies in September
• China: retail trade up (3.2%; Aug: 2.1%) due to higher auto and household appliance sales driven by policy support.
• Japan: retail sales slowed sharply (0.4%; Aug: 2.9%), falling short of expectations.
• Hong Kong: remained weak (-6.9%; Aug: -10.0%), marking the seventh consecutive month of contraction due to shifts in consumer habits.
• 2024 sales growth forecast maintained at 6.0% (2023: 7.7%), anticipating acceleration in the final quarter
• Year-to-date, sales growth grew 5.6% (Jan-Aug: 5.8%), below our full-year target of 6.0%. Despite this weak performance, we continue to project steady sales growth till year-end. This is mainly supported by the government's Sumbangan Tunai Rahmah (STR) phase 4 cash transfers in November, a continued rise in tourist arrivals and sustained domestic demand growth tied to rising household income.
• Our 3Q24 GDP growth forecast remains at 5.3% (2Q24: 5.9%), in line with the DOSM's advance estimate, with final figures set for release on November 15th. Overall, 2024 GDP growth is projected to settle at 5.0% (2023: 3.6%), and moderating slightly to 4.8% in 2025.

Source: Kenanga Research - 8 Nov 2024