Exports moderate

Despite sustaining strong double-digit expansion, all major sectors recorded moderate export growth in February 2022. (File pic shows North Port, Klang.)

PETALING JAYA: Malaysia’s trade maintained a double-digit year-on-year (y-o-y) growth of 17.5% to RM184.8bil in February 2022, but for the first time in five months, the total trade fell below RM200bil mainly due to decrease in exports as well as imports compared to the previous month.

Export growth moderated to a 16.8% y-o-y increase in February 2022, maintaining its double-digit growth since August 2021 compared with a 23.9% y-o-y increase in January 2022.

MIDF Research in a note said the moderation was in line with their expectations looking at the trend in regional countries’ trade performance.

The moderation of exports growth was due to the slower growth in exports to top three major markets, namely the United States, China, and Singapore.

The slower exports growth was recorded to the US for E&E (electrical and electronics) exports in February 2022 with growth coming in at 39.5% y-o-y compared with a 50.5% y-o-y growth in the previous month.

The continued drag of a 68.8% y-o-y decrease of rubber products reflects to the moderation towards export growth.

Despite having strong E&E exports, the slower growth was mainly due to continued declines in exports of rubber products and refined petroleum.

Research house noted the moderation in exports to Singapore was also due to slower growth in refined petroleum exports.

“In contrast, exports to the European Union (EU) and Asean grew at a stronger pace. To the EU, the growth in exports was mainly due to higher exports of E&E while shipments to Asean were driven by stronger E&E exports.

Despite sustaining strong double-digit expansion, all major sectors recorded moderate export growth in February 2022.

The agriculture sector recorded a lower y-o-y growth of 38.7% in February 2022 compared with 75.6% y-o-y growth in the previous month due to slower growth in palm oil exports and continued contraction in seafood exports.

Exports by the manufacturing sector grew at 14.2% in February 2022 but lower than the previous month of 19.3% y-o-y growth.

“While E&E exports rose faster, the moderation in manufacturing exports was due to modest growth in exports of petroleum products; machinery, equipment and parts; and optical and scientific equipment, and a larger drop in rubber products shipments,” it said.

The mining sector growth moderated to 30.7% y-o-y growth in February 2022 compared to a 38.4% y-o-y growth in the previous month following the slower growth in liquefied natural gas exports.

On the other hand, exports of crude petroleum rose in February 2022, according to research house.

Ministry of International Trade and Industry Malaysia said the export of E&E products, valued at RM39.65bil and accounted for 38.8% of total exports, showed a 25.8% increase compared with February 2021.

“Around 77.5% of exports growth in February 2022 was contributed by the increased shipments of E&E and palm oil & palm oil products,” the research report noted.Meanwhile, imports growth moderated to 18.4% y-o-y increase in February 2022 compared with a 26.7% y-o-y increase in the previous month.

However, the research house believes that sustained double-digit growth in imports indicates rising domestic economic activities and better growth outlook following further reopening of the economy.

The trade surplus widened to RM19.8bil in February 2022 compared with RM18.6bil in the previous month due to the larger decline of 10.8% month-on-month (m-o-m) for imports in contrast to a 7.9% month-on-month decline in exports.

The research house noted the decline in both exports and imports was attributable to shorter working days in February 2022 and the Chinese New Year holidays.

It also noted sustained trade surplus indicates Malaysia’s economy has been benefiting from the expansion in global demand.