Malaysia’s distributive trade sales growth moderated for a third consecutive month in July 2026, easing to 9.0% year-on-year from 10.1% in June, although domestic demand remained relatively firm, according to Kenanga Research.
Sales value rose to RM170.5 billion from RM168.5 billion in June, marking a two-month high and remaining above the year-to-date monthly average of RM167.2 billion.
On a month-on-month basis, distributive trade rebounded 1.2%, after contracting 1.6% in June, suggesting some pickup in consumer spending during the month.
Kenanga said the moderation was broad-based across the three main sub-sectors as spending conditions normalised.
Retail trade growth eased to 6.4% year-on-year from 6.6%, mainly due to slower automotive fuel sales, which moderated to 7.5% from 10.8%.
This was partly offset by stronger sales at other specialised stores, which increased 7.6% from 7.0% previously.
On a month-on-month basis, retail sales fell 1.0% after rising 0.2% in June.
Wholesale trade growth slowed to 11.7% from 12.4%, weighed by weaker machinery, equipment and supplies sales, as well as slower growth in other specialised wholesale activities.
However, wholesale sales rebounded 2.1% month-on-month after two consecutive months of contraction.
Motor vehicle sales recorded a sharper slowdown, with growth easing to 7.9% from 14.9% in June.
Motor vehicle sales growth moderated to 8.3% from 22.3%, even as unit car sales rose to 73,600 vehicles, compared with 70,100 units in July 2025.
Kenanga maintained its 2026 distributive trade growth forecast at 8.1%, compared with 5.6% in 2025.
The research house said retail and wholesale activity had moderated by less than initially expected, indicating that domestic demand remained reasonably strong entering the second half of 2026.
It also sees some upside risk to its forecast, supported by stronger tourism-related spending, a resilient labour market and spillovers from export-oriented industries.
However, Kenanga cautioned that three consecutive months of slower annual growth warranted some caution.
Motor vehicle sales are also expected to remain volatile due to several underlying factors affecting the segment.
Kenanga maintained its 2026 GDP growth forecast at 5.3%, compared with 5.2% growth in 2025.
It said recent data suggest Malaysia entered the second half of the year from a position of strength, although growth is expected to moderate as consumer spending normalises and global uncertainties persist.
Resilient domestic demand should nevertheless continue to provide a cushion to the broader economy, the research house said.
