Malaysia’s exports fell 5.3% in February to RM66.60bil, the lowest value since August 2016 due to a contraction in the exports of manufactured goods and petroleum products due to the short calendar month and festivities.
The fall in exports was primarily due to a short calendar month on top of long Chinese New Year (CNY) holidays, according to MIDF Research.
As for imports, they fell more than exports at 9.4% on-year. During this holiday, all Chinese factories were shut down with most of them closed one or two weeks prior to the festive holidays.
“As the celebration put a halt to mass production, it disrupted global supply chain resulting in a weak trade performance,” it said.
The research house said all sectors recorded a negative exports growth: agriculture (-13.7% on-year), manufacturing (-4.3% on-year) and mining (-5.5%on-year.).
Despite the poor exports and imports figures, trade surplus maintained above RM11bil in February.
On a monthly basis, both exports and imports contracted by 22% and 24.8% respectively.
The 5.3% decline was a stark contrast with a Bloomberg survey of an increase of a 2.3%.
Re-exports were valued at RM10.5bil, down by 28.1% and accounted for 15.7% of total exports. Domestic exports increased RM342.5mil or 0.6% to RM56.2bil,” he said.
Imports fell by 9.4% to RM55.50bil, the lowest since May 2016. The Bloomberg survey was a 0.9% increase.
Total trade in February 2019 declined by 7.2% to RM122.10bil from February 2018. Trade surplus was RM11.10bil, surged 22.7% or RM2bil when compared to the previous year.
MIDF Research pointed out imports of both intermediate and capital goods continue to post negative growth in February 2019 at 2.8% on-year and 14.9% on-year respectively.
Consumption goods plunged into a negative territory of 11.6% on-year after four consecutive months of positive growth, largely affected by CNY holidays.
“Nevertheless, capital spending momentum signals that manufacturers are not optimistic on the future demand for its products which points at declining activity and deteriorating confidence in the industry. This could weigh on employment opportunities and future exports.
“Looking ahead, imports of the duo are likely to remain weak, in line with the latest PMI of March 2019 which extended its contraction trends to 47.2,” it said.
Earlier, the Ministry of International Trade and Industry (Miti) said the weaker exports in February – which account for 83.8% of total exports – contracted by 4.3% to RM55.84bil.
“This was mainly contributed by the decrease in exports of petroleum products, manufactures of metal as well as optical and scientific equipment. However, exports were recorded for electrical and electronic (E&E) products, iron and steel products as well as paper and pulp products,” it said.
Miti said exports of agriculture goods (6.7% share) contracted by 13.7% to RM4.48bil. This contraction was led mainly by the decline in exports of palm oil and palm oil-based agriculture products, particularly palm oil which declined by 11.4% to RM2.69bil, due to lower average unit value (AUV).
E&E products, valued at RM25.81bil and constituted 38.8% of total exports, increased by 4.9% from February 2018.
Petroleum products, RM4.32bil, 6.5% of total exports, fell by 32.6% while chemicals and chemical products, RM3.93 billion, 5.9% of total exports, decreased by 4.2%. LNG, RM3.15bil, 4.7% of total exports, increased by 8.6%.Palm oil and palm oil-based agriculture products, RM3.04bil, 4.6% of total exports, decreased by 16.9%.
Compared to January 2019, exports of manufactured, mining and agriculture goods contracted by 20.5%, 35.2% and 20.2%, respectively.
In February 2019, trade with China which absorbed 14.5% of Malaysia’s total trade slipped by 16.7% on-year to RM17.67bil.