Exports for June rose 5.4 percent to RM60.97bil compared with the same month a year ago on higher electrical and electronic (E&E) sales to Hong Kong, the United States, Japan, Vietnam and China.
Economists in a Bloomberg survey expected a median 3.1 percent gain in exports following a 6.7 percent surge in May. However, imports unexpectedly slowed to a 3.6 percent growth against median expectations of an 8.8 percent rise. They rose 16.2 percent in May.
For the first half of the year, exports rose 4.2 percent to RM351.21bil while imports grew by 8 percent to RM300.12bil with the top 10 export destinations being Singapore, China, Japan, the United States, Thailand, Australia, Hong Kong, India, Indonesia and South Korea.
Alliance Bank Malaysia Bhd chief economist Manokaran Mottain told StarBiz that despite the better-than-consensus forecast, the outlook for exports was still dim.
“We’re still bearish on the exports outlook, as suggested by the poor purchasing managers index data in our major export destinations,” he said. Going by the better-than-expected exports performance, Manokaran said real gross domestic product (GDP) might have fared better than expected.
“We’re expecting slightly above 4 percent in the second quarter, moderating from 4.7 percent in the previous quarter,” he said.
According to the Statistics Department, E&E products, which comprised 33.6 percent of manufactured goods exports, saw shipments rise 2.1 percent to RM20.46bil. Overall, manufactured goods, which comprised 66.7 percent of exports, registered a 5.8 percent gain to RM41.55bil.
The data showed exports of mining goods rose 18.8 percent to RM11.9bil while agricultural goods saw a 14.3 percent contraction to RM7bil.
On imports, intermediate goods comprising 61.2 percent of total imports, decreased 5.3 percent to RM31.68bil. Capital goods, comprising 15.7 percent, surged 15.5 percent to RM8.13bil while consumption goods, comprising 7.5 percent, rose 10.9 percent to RM3.86bil.
Exports to the European Union, particularly semiconductor devices and crude rubber, decreased by 8.4 percent to RM5.37bil attributable to lower shipments to France, Germany, Italy and Sweden but palm oil exports jumped 50.6 percent to RM649.5mil.
Exports to the United States increased by 4.9 percent to RM5.25bil mainly from E&E products, which expanded by 9.1 percent.
Exports to Asean, accounting for 25.2 percent of total exports, grew by 4.2 percent to RM15.34bil, exports to China increased by 13.2 percent to RM8.29bil while exports to Japan rose 24.9 percent to RM7.1bil.
Citigroup Inc senior economist Kit Wei Zheng said, in a report following the release of the external trade data, that the sustainability of E&E exports remained in question.
“While E&E seems to be the main exports driver, momentum appears to be slowing in June consistent with the signs provided by leading indicators. Out of 10 indicators that we tracked (six of which were US indicators, and four from Asia), only three saw month-on-month increases in June, compared to six or seven categories in previous months,” he said.
Kit said for July, only two of four indicators saw an expansion with slowing palm oil exports due to lower crude palm oil prices and export volumes.
He said the import slowdown was likely a technical pullback after the surge in May’s imports rather than a reversal of the underlying trend of robust domestic demand and lacklustre exports.
“While details are not yet available, capital goods imports were exaggerated in May by the delivery of transport equipment, which may have fallen in June. Soft intermediate goods imports suggest exports weakness ahead,” Kit said.
He expected Bank Negara to maintain benchmark interest rates at 3 percent this year with full-year GDP growth on track to hit the upper half of the official 4 percent to 5 percent forecast.