Distributive trade sales moderated to 4.7% YoY (Oct: 5.5%) after an uptick in the previous month
MoM growth: fell by 0.5% (Oct: 1.3%), the slowest in two months.
Sales value: Fell slightly to RM149.3b (Oct: RM150.1b) after hitting a record high the prior month.
A broad-based slowdown led by a sharp moderation in retail trade
Motor vehicles (1.4%; Oct: 2.7%): slower growth across sub-sectors, notably in sales, maintenance and repair (13.7%; Oct: 20.7%), parts and accessories (8.6%; Oct: 9.8%), and maintenance and repair (6.3%; Oct: 9.3%). Weak motor vehicle sales (-4.3%; Oct: -3.9%) due to a high base effect also weighed down on growth, with unit sales in November falling to 67.5k units (Nov 2023: 73.3k).
Wholesale trade (4.7%; Oct: 4.8%): slightly lower growth, with moderation across sub-sectors partly offset by strong performance in agriculture, raw materials, and live animals (13.7%; Oct: 7.9%).
Retail trade (5.8%; Oct: 7.1%): growth slowed due to a broad-based slowdown, led by a sharp slowdown in non-specialised stores (5.5%; Oct: 8.5%) and food, beverages & tobacco (6.5%; Oct: 9.0%).
Mixed retail sales performance across regional economies in November
China (3.0%; Oct: 4.8%): Retail trade hit a three-month low, showing limited recovery.
Japan (2.8%; Oct: 1.3%): Outperformed expectations (consensus: 1.6%), driven by rising wages.
Hong Kong (-7.3%; Oct: -2.8%): Contracted for the ninth straight month, reflecting shifts in consumption patterns and a strong Hong Kong Dollar.
2024 sales growth may miss 6.0% target (2023: 7.7%); 2025 forecast revised to 6.5% from 7.6%
Year-to-date performance: Sales grew 5.5% in the first 11 months (Jan-Oct: 5.6%), below our full-year target of 6.0%. Weaker-than-expected November growth, driven by seasonal factors, limits the likelihood of reaching the target, even with the surge in festive season spending in December.
Supporting factors: Despite our forecast revision, sales growth in 2025 is expected to remain stable, supported by record-high cash transfers under Sumbangan Tunai Rahmah(STR), salary hikes for government servants, minimum wage hikes in the private sector, rising tourist arrivals, and continued government spending under record-high Budget 2025 allocation.
GDP growth outlook: Against this backdrop, we project 2025 GDP growth to moderate to 4.8% (2024E: 5.0%), reflecting a high base effect from 2024 and normalisation of economic activities.
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