Malaysia’s October exports jump 16.7%, fastest since May 2014

by **Cals** Sat 05 Dec 2015, 23:58

Saturday, 5 December 2015 | MYT 8:30 PM

Malaysia’s October exports jump 16.7%, fastest since May 2014

BY JOSEPH CHIN

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Malaysia’s exports surged 16.7% in October to RM75.8bil, which was the fastest since May 2014, powered by the growth in exports of manufactured goods

PETALING JAYA: Malaysia’s exports surged 16.7% in October to RM75.8bil, which was the fastest since May 2014, powered by the growth in exports of manufactured goods – especially electrical and electronics (E&E) products -- to major markets of Asean, China, the EU and the US.
The sharp increase surprised a survey of a more conservative increase of 8.4% increase. CIMB Economics Research said yesterday the exports growth at 16.6% on-year marked the fastest since May 2014 and it expected the strong growth to continue.
The Ministry of International Trade and Industry (MITI) said in a statement the rise in exports were mainly to China, which reported a RM1.9bil increase, followed by the EU which saw a RM1.7bil increase. Exports to the US saw a RM1.7bil increase, Singapore (up RM1.1bil), and Australia (up RM789.2mil).
MITI said the main commodities that contributed to the rise in exports in October from a year ago were the 22.7% increase in E&E products (which contributed 34.6% to total exports) to RM26.2bil. It also noted timber and timber-based products reported a 28.5% increase to RM2.1bil, though in overall volume, accounted for only 2.8% of the country’s exports.

Also recording stronger export growth were palm oil and palm-based products, which contributed 8.1% to total exports. Exports of palm oil and its products increased 5.7% or RM330.4mil to RM6.2bil due to higher volume of exports although average unit value fell 3.6%.
MITI said on a month-on-month basis, October exports increased 8.1% or RM5.6bil to RM75.8bil from RM70.2bil. In seasonally adjusted terms, exports rose 4.9%.
For the January to October period, Malaysia’s exports expanded by 1.5% to RM644.02bil from RM634.46bil in the previous corresponding period while the trade surplus rose 21.5% to RM76.07bil.
CIMB Economics Research said yesterday the exports growth beat its 11% increase and Bloomberg consensus expectations of a 8.4% increase while imports contraction was smaller versus its expectation (-2.0%) and consensus (-3.2%).
“The strong exports growth led the trade surplus to widen to RM12.2bil (September: RM9.7bil). Exports growth at 16.6% on-year marked the fastest since May 2014 while the surplus was at its biggest since February 2010.
“While low base effects and a weaker ringgit could be the main explanatory factors, the sharp surge could be due to slight improvement in volume. Manufactured goods exports soared; commodities remained a drag. Exports of manufactured goods surged by 22.2% on-year, led by 22.7% on-year growth in exports of E&E – the strongest in five and a half years,” it said.
MITI said total trade rose 8.2% to RM139.46bil while trade surplus rose from RM1.08bil in October 2014 to RM12.16bil, making it the 216th consecutive months of trade surplus since November 1997.
Imports were slightly lower at RM63.65bil, down 0.4% from RM64.98bil a year ago. On a on-year basis, higher imports were recorded with China (+RM1.7bil), US (+RM1.2bil), Taiwan (+RM906.4mil), Thailand (+RM728.1mil) and EU (+RM695.8mil).
The strong exports growth led the trade surplus to widen to RM12.2bil (September 2015: RM9.7bil).
CIMB Research said the trade deficit with China narrowed to RM2.6bil in October from RM5.9bil in September.
It said imports of intermediate goods contracted, albeit a smaller rate of 6.5%, compared with the contraction of 13.7% in September. Imports of capital goods and consumption goods continued to record strong growth of 18.8% and 34.1% on-year respectively from September’s 29.9% and 43.2% respectively.
“However, as intermediate goods imports accounts for a far bigger share, its pullback led overall imports to contract. Nonetheless on US dollar terms, the data was not as upbeat.
“In US dollar terms, exports and imports continued to decline in October,” it said. It explained that exports contracted at a slower pace of 10.9% on-year versus September’s contraction of 18.8%. Imports declined faster by 23.9% versus September’s contraction of 18.2%, suggesting slightly better exports volume helped to offset some of the impact of weaker ringgit.
However, CIMB Research expected the recent trade trends to continue with strong exports growth while imports to stay weak in the fourth quarter of this year.