3.1% dip in exports growth looms over Malaysia

Poor performance is expected.

According to DBS, Oct12 trade figures are on tap this Friday and a poor outcome is on the cards.

Here's more from DBS:

Headline export growth is expected to dip into negative territory again after a blip in the previous month. A -3.1% YoY has been penciled into our forecast, from 2.6% in September.

Weak global demand continues to weigh down on export performance as the PMIs of key markets have continued to languish. Although there have been marginal improvements in the PMIs for China and the US, whether that will eventually materialize into a firmer recovery in demand remains to be seen.

In fact on a short term cyclical basis, sign of an improvement in demand due to the year end festive season was practically non-existence. So, don’t pin too high hope on a turnaround at least for the next 2-3 months.

Separately, domestic demand has remained resilient. Effects of the Economic Transformation Programme as well as a buoyant labour market should ensure that import growth remains strong.

In our opinion, import growth is likely to register 12% YoY, which should thus deliver a trade surplus of about MYR 6.6bn.