Feb 2024 saw exports decline slightly (Feb 2024: -0.8% YoY; Jan 2024: +8.7% YoY) while imports growth eased (Feb 2024: +8.4% YoY; Jan 2024: +18.7% YoY), reflecting the calendar effect of Lunar New Year holidays in an already short month.
Maybank Investment Bank (Maybank IB) said today (Mar 19) exports and imports growth of +3.9% and +13.6% in 2M 2024 vs -8.0% and -6.4% drops in 2023 signal external trade rebounding to support the outlook of firmer economic growth this year.
Exports “flattish”, imports moderated in “Lunar New Year”
Maybank Group chief economist Suhaimi Ilias said today (Mar 19) that exports declined marginally in Feb 2024 (-0.8% YoY; Jan 2024: +8.7% YoY) as lower exports of Manufacturing (Feb 2024: -2.4% YoY; Jan 2024: +9.3% YoY) and Agriculture (Feb 2024: -4.8% YoY; Jan 2024: +17.3% YoY) countered the rebound in Mining shipments (Feb 2024: +16.8% YoY; Jan 2024: -4.9% YoY).
Manufacturing exports dropped on declines in the exports of E&E products (Feb 2024: -9.8% YoY; Jan 2024: -6.5% YoY), Petroleum Products (Feb 2024: -14.0% YoY; Jan 2024: +24.2% YoY) and Chemical & Chemical Products (excluding Plastic) (Feb 2024: -5.7% YoY; Jan 2024: +4.4% YoY).
Agriculture exports fell following the reversal in palm oil exports (Feb 2024: -15.5% YoY; Jan 2024: +25.7% YoY) due to lower export price (Feb 2024: -23.7% YoY; Jan 2024: -16.1% YoY) while export volume growth moderated (Feb 2024: +10.8% YoY; Jan 2024: +49.8% YoY).
Mining exports rebounded as LNG exports recovered (Feb 2023: +16.5% YoY; Jan 2024: -9.3% YoY) on the increase in export volume (Feb 2024: +18.5% YoY; Jan 2024: +2.1% YoY) offsetting export price decline (Feb 2024: -23.7% YoY; Jan 2024: -11.2% YoY), together with higher crude petroleum exports (Feb 2024: +36.3% YoY; Jan 2024: +17.7% YoY), similarly on higher export volume (Feb 2024: +143.3% YoY; Jan 2024: +18.3% YoY) offsetting lower export price (Feb 2024: -44.0% YoY; Jan 2024: -0.5% YoY).
Imports growth was sustained by the double-digit growth in imports of capital goods (Feb 2024: +30.3% YoY; Jan 2024: +41.5% YoY), intermediate goods (Feb 2024: +14.3% YoY; Jan 2024: +21.3% YoY) and consumption goods (Feb 2024: +19.7% YoY; Jan 2024: +25.3% YoY), while imports for reexports dropped (Feb 2024: -20.2% YoY; Jan 2024: +4.1% YoY).
But positive 2M 2024 augurs well for full-year outlook
The “volatile” external trade figures in the first two months of 2024 reflected the calendar effect i.e. Jan 2024 external trade was boosted by shipments ahead of the Lunar New Year that fell in already short month of Feb 2024 that comes with extended shutdowns domestically and regionally (e.g. 10-day holidays in China; week-long holidays in Vietnam).
But external trade’s positive start to 2024 as per the +3.9% exports growth in 2M 2024 augurs well for the expected rebound in exports this year to support the outlook of firmer 2024 economic growth of +4.4% (2023: +3.7%).
At the same time, the firmer growth in imports of capital goods (2M 2024: +36.5%; 2023: +7.1%) and consumption goods (2M 2024: +22.7%; 2023: +0.1%) plus rebound in imports of intermediate goods (2M 2024: +17.8%; 2023: -11.9%) signal firmer domestic demand and industrial activities.
For this year, Maybank IB currently expects exports and imports to rebound by +4.7% and +5.6% respectively.
A major driver for the projected exports rebound this year is the projected turnaround in electronics cycle as WSTS expects global semiconductor sales to rebound by +13.1% in 2024 (2023: -8.2%).
Although E&E exports are still down YTD (2M 2024: -8.1%; 2023: -3.1%), Malaysia Semiconductor Industry Association (MSIA) expects the industry to rebound in 2H 2024.
