By Ranjeetha Pakiam
Dec. 6 (Bloomberg) -- Malaysia's manufacturers may face a ``tough year'' in 2009 as the global recession cuts demand for computer chips, components and electronic goods, a trade group said after a survey of local businesses.
Next year will be ``a very trying time, a tough year,'' Mustafa Mansur, president of the Federation of Malaysian Manufacturers, said in an interview in Kuala Lumpur yesterday. ``We will feel the impact.''
Four-fifths of the respondents in the trade group's survey expect new orders and sales forecasts will be ``strongly'' or ``moderately'' hurt by the global recession. Malaysia's government on Nov. 4 announced a 7 billion-ringgit ($1.9 billion) spending package for public projects to support economic growth that's set to slow to the worst pace in eight years in 2009.
Global economic outlook will worsen in the next six to 12 months, according to 82 percent of the 113 companies surveyed last month by the Federation of Malaysian Manufacturers.
``With half the world in recession, the downside on Malaysia's manufacturing sector will be significant,'' said Irvin Seah, an economist at DBS Group Holdings Ltd. in Singapore. He expects four straight quarters of year-on-year declines in orders, starting from the last three months of 2008.
Global growth is headed for a ``major downturn'' next year, with U.S. gross domestic product growth likely slowing to 0.1 percent, the International Monetary Fund said in October. The U.S., Japan, Germany and the 15 European nations that use the euro are in recession.
Malaysia's government has forecast its economy to expand 3.5 percent next year. The $181 billion economy grew at the slowest pace in three years last quarter, prompting Bank Negara Malaysia, the nation's central bank, to cut interest rates for the first time since 2003 on Nov. 24. Exports slid in October for the first time in 15 months.
About 77 percent of the survey's respondents said their capital investments would be ``negatively affected,'' Mustafa said. Job retrenchments are also expected, he said.
Saturday, December 6, 2008
Friday, December 5, 2008
Oct exports post unexpected 2.6pc drop
By Rupa Damodaran
Malaysia's trade with other countries saw a downturn in October, with exports falling for the first time in 15 months.
Exports dropped 2.6 per cent to RM53.46 billion from a year earlier owing to lower demand for commodities and electrical and electronic (E&E) products.Imports, meanwhile, fell 5.3 per cent to RM43.84 billion.Total merchandise trade (exports plus imports) was RM97.3 billion.
The numbers came in far below market expectations and a Business Times poll, which had projected exports to moderate to 7.39 per cent and imports to grow at a slower pace of four per cent.
The Ministry of International Trade and Industry (Miti) said that compared with September, exports in October were down 14.2 per cent while imports fell 7.8 per cent."The decline in exports was mainly attributed to lower exports of E&E products and commodities, namely refined and crude petroleum as well as palm oil," Miti said.Major markets that registered declines were the US, Singapore, mainland China, Hong Kong and Australia.
The Asean region accounted for RM13.6 billion, or 25.4 per cent, of Malaysia's total exports in October, down 6.1 per cent from the same month last year because of lower exports of refined petroleum products as well as iron and steel products.
Exports to the US and the European Union declined mainly because of lower exports of E&E products.Exports to China dipped owing to lower exports of palm oil, crude rubber, metal and refined petroleum products.However, exports to India and the United Arab Emirates (UAE) increased in October.
Exports to India rose 10.7 per cent to RM2.45 billion, contributed mainly by higher exports of crude petroleum and palm oil.Exports to the UAE surged 52.6 per cent to RM1.13 billion, largely due to higher exports of jewellery and iron and steel products.
In the first 10 months of the year, Malaysia's trade surpassed the RM1 trillion mark to reach RM1.012 trillion, up 11 per cent.Exports expanded 13.9 per cent to RM565.66 billion, while imports increased 7.4 per cent to RM446.81 billion.
HSBC Bank economist Prakriti Sofat described the export data as the worst in more than 20 months, while import growth showed a five-year low.Electronics, which had a good run in the April-June period, showed a renewed weakness, contracting by nearly 13 per cent year-on-year
Malaysia's trade with other countries saw a downturn in October, with exports falling for the first time in 15 months.
Exports dropped 2.6 per cent to RM53.46 billion from a year earlier owing to lower demand for commodities and electrical and electronic (E&E) products.Imports, meanwhile, fell 5.3 per cent to RM43.84 billion.Total merchandise trade (exports plus imports) was RM97.3 billion.
The numbers came in far below market expectations and a Business Times poll, which had projected exports to moderate to 7.39 per cent and imports to grow at a slower pace of four per cent.
The Ministry of International Trade and Industry (Miti) said that compared with September, exports in October were down 14.2 per cent while imports fell 7.8 per cent."The decline in exports was mainly attributed to lower exports of E&E products and commodities, namely refined and crude petroleum as well as palm oil," Miti said.Major markets that registered declines were the US, Singapore, mainland China, Hong Kong and Australia.
The Asean region accounted for RM13.6 billion, or 25.4 per cent, of Malaysia's total exports in October, down 6.1 per cent from the same month last year because of lower exports of refined petroleum products as well as iron and steel products.
Exports to the US and the European Union declined mainly because of lower exports of E&E products.Exports to China dipped owing to lower exports of palm oil, crude rubber, metal and refined petroleum products.However, exports to India and the United Arab Emirates (UAE) increased in October.
Exports to India rose 10.7 per cent to RM2.45 billion, contributed mainly by higher exports of crude petroleum and palm oil.Exports to the UAE surged 52.6 per cent to RM1.13 billion, largely due to higher exports of jewellery and iron and steel products.
In the first 10 months of the year, Malaysia's trade surpassed the RM1 trillion mark to reach RM1.012 trillion, up 11 per cent.Exports expanded 13.9 per cent to RM565.66 billion, while imports increased 7.4 per cent to RM446.81 billion.
HSBC Bank economist Prakriti Sofat described the export data as the worst in more than 20 months, while import growth showed a five-year low.Electronics, which had a good run in the April-June period, showed a renewed weakness, contracting by nearly 13 per cent year-on-year
Malaysia Exports Post First Drop in 15 Months on Global Slump
By Stephanie Phang and Michael Munoz
Dec. 4 (Bloomberg) -- Malaysia's exports unexpectedly posted the first decline in 15 months in October as electronics and palm oil sales fell amid a global recession.
Overseas sales dropped 2.6 percent from a year earlier to 53.5 billion ringgit ($14.7 billion) after gaining a revised 15 percent in September, the trade ministry said in a statement in Kuala Lumpur today. The median estimate in a Bloomberg News survey of 13 economists had been for a 6.6 percent gain.
Malaysia will feel the impact of a ``deterioration in the external environment'' this quarter and needs to shore up domestic demand to ensure growth next year, the central bank said last week. The $181 billion economy expanded at the slowest pace in three years last quarter, prompting Bank Negara Malaysia to cut interest rates for the first time since 2003 on Nov. 24.
``The global downturn in demand pulled down Malaysian exports in October, as they have for economies across the region, along with the drag from lower commodity prices,'' said David Cohen, director of Asian economic forecasting at Action Economics in Singapore.
Malaysia's government announced a 7 billion-ringgit spending plan to bolster its economy on Nov. 4, joining countries from Germany to South Korea in trying to limit the impact of a deepening global economic slump that's already pushed neighboring Singapore into recession.
Sales by American-owned electronics makers in Malaysia will fall this year and next as recessions in the U.S., Japan and Europe sap demand for Dell Inc. computers and other devices, an industry group said last week. Dell, Intel Corp., Motorola Inc. and other U.S. electronics makers account for about 12 percent of Malaysia's total exports.
U.S. Exports
Malaysia's exports to the U.S. dropped 19 percent to 6.44 billion ringgit in October from a year earlier because of a decline in electrical and electronics shipments, the ministry said today. The U.S. has fallen behind Singapore in the first 10 months of the year as Malaysia's largest overseas market.
Exports of electrical and electronics goods, which made up 37 percent of total exports in October, plunged 13 percent from a year earlier. Unisem Bhd., the country's second-largest publicly traded semiconductor assembler, posted a second quarter of profit decline in the three months to September.
Palm oil sales fell 4.6 percent in October as prices eased after reaching records earlier this year. Malaysia is Southeast Asia's second-largest oil and gas producer and the world's No. 2 palm oil seller.
Imports dropped 5.3 percent in October to 43.8 billion ringgit, leaving a trade surplus of 9.62 billion ringgit, the smallest since March. Exports grew 14 percent in the first 10 months, while imports expanded 7.4 percent, leaving a trade surplus of 118.8 billion ringgit.
To contact the reporter on this story: Stephanie Phang Singapore at sphang@bloomberg.net; Manirajan Ramasamy in Kuala Lumpur at rmanirajan@bloomberg.net
Last Updated: December 3, 2008 23:03 EST
Dec. 4 (Bloomberg) -- Malaysia's exports unexpectedly posted the first decline in 15 months in October as electronics and palm oil sales fell amid a global recession.
Overseas sales dropped 2.6 percent from a year earlier to 53.5 billion ringgit ($14.7 billion) after gaining a revised 15 percent in September, the trade ministry said in a statement in Kuala Lumpur today. The median estimate in a Bloomberg News survey of 13 economists had been for a 6.6 percent gain.
Malaysia will feel the impact of a ``deterioration in the external environment'' this quarter and needs to shore up domestic demand to ensure growth next year, the central bank said last week. The $181 billion economy expanded at the slowest pace in three years last quarter, prompting Bank Negara Malaysia to cut interest rates for the first time since 2003 on Nov. 24.
``The global downturn in demand pulled down Malaysian exports in October, as they have for economies across the region, along with the drag from lower commodity prices,'' said David Cohen, director of Asian economic forecasting at Action Economics in Singapore.
Malaysia's government announced a 7 billion-ringgit spending plan to bolster its economy on Nov. 4, joining countries from Germany to South Korea in trying to limit the impact of a deepening global economic slump that's already pushed neighboring Singapore into recession.
Sales by American-owned electronics makers in Malaysia will fall this year and next as recessions in the U.S., Japan and Europe sap demand for Dell Inc. computers and other devices, an industry group said last week. Dell, Intel Corp., Motorola Inc. and other U.S. electronics makers account for about 12 percent of Malaysia's total exports.
U.S. Exports
Malaysia's exports to the U.S. dropped 19 percent to 6.44 billion ringgit in October from a year earlier because of a decline in electrical and electronics shipments, the ministry said today. The U.S. has fallen behind Singapore in the first 10 months of the year as Malaysia's largest overseas market.
Exports of electrical and electronics goods, which made up 37 percent of total exports in October, plunged 13 percent from a year earlier. Unisem Bhd., the country's second-largest publicly traded semiconductor assembler, posted a second quarter of profit decline in the three months to September.
Palm oil sales fell 4.6 percent in October as prices eased after reaching records earlier this year. Malaysia is Southeast Asia's second-largest oil and gas producer and the world's No. 2 palm oil seller.
Imports dropped 5.3 percent in October to 43.8 billion ringgit, leaving a trade surplus of 9.62 billion ringgit, the smallest since March. Exports grew 14 percent in the first 10 months, while imports expanded 7.4 percent, leaving a trade surplus of 118.8 billion ringgit.
To contact the reporter on this story: Stephanie Phang Singapore at sphang@bloomberg.net; Manirajan Ramasamy in Kuala Lumpur at rmanirajan@bloomberg.net
Last Updated: December 3, 2008 23:03 EST
October annual exports suffer surprise drop
theedgedaily..5 dec 2008
KUALA LUMPUR: The country's exports unexpectedly fell in October from a year ago, the latest evidence that it is being hit by falling demand from abroad because of the global economic slowdown.
The 2.6% decline from a year ago compared with economists' expectations for a 6.3% rise in a country where trade is more than 100% of gross domestic product, or the value of all goods and services produced.
"We are likely to see much weaker numbers for Malaysia going forward with external demand very weak, and with the unlikelihood that demand for electronics will recover anytime soon," said Alvin Liew, an economist at Standard Chartered.
Exports dipped slightly in July 2007 but the last big fall was in March 2007 when they fell 4.5%.
Imports for October fell by 5.3% year-on-year compared with analyst expectations for a 1.8% rise.
The data comes after South Korea saw exports slide by 18.3% in November, the biggest drop in seven years, and amid tumbling oil and commodity prices, key exports for Malaysia.
Exports totalled RM53.46 billion, down from RM62.31 billion in September, while imports fell to RM43.84 billion.
That ate into the trade surplus, which fell to RM9.62 billion in October compared with RM14.5 billion in September.
Malaysia has pinned its hopes of avoiding a recession on boosting exports to Asia, although the October data showed exports to the 10 countries that make up Asean fell by 6.1% from a year ago and exports to China fell to RM4.89 billion from RM5.26 billion on weaker commodity and oil prices.
Malaysia hopes to record economic growth of 3.5% in 2009, but many economists say it will not manage that. Investment bank UBS sees no growth at all.
The poor trade data may spur Malaysia's central bank into action after its first rate cut in five years earlier this month when it shaved 25 basis points off its key rate to 3.25%.
"The central bank will look into at least another 25 basis points. I'm looking at 50 basis points in January and February," said Gundy Cayhadi, economist at IDEAglobal.com. -- Reuters
KUALA LUMPUR, Dec 4 (Reuters) - Malaysia's exports unexpectedly fell 2.6 percent in October from a year earlier due to weakening global demand for electronics and commodities, the government said on Thursday.
Imports dropped 5.3 percent from a year ago, according to government data.
*************************************************************
KEY POINTS:
- A Reuters survey of economists had predicted annual export growth of 6.3 percent for October and import growth of 1.8 percent.
- For the full story on the October trade data, please double-click on
ANALYST COMMENTS:
GUNDY CAHYADI, ECONOMIST, IDEAglobal.com
"The export growth numbers will be very low. It will remain in the low single digit and possibly (be) negative figures. It will stay like that at least until the second half of next year. Commodities prices have been slowing. That held Malaysian exports strong in Q2 and somewhat in Q3. The central bank will look into at least another (interest rate cut of) 25 basis points. I'm looking at 50 basis points (cut) in January and February."
ALVIN LIEW, STANDARD CHARTERED BANK
"We were definitely expecting some easing off of growth in exports in October but the magnitude of the fall was certainly a surprise to us and to the market as well.
"We do know two things probably affected the numbers: one was the strong base effect in October 2007 and two, the sustained decline in global commodity prices.
"For a large part of the year, Malaysian exports have shown healthy growth largely due to strong commodity exports compared to say, Singapore. But we are now starting to see the impact of declining commodity prices.
"We are likely to see much weaker (exports) numbers for Malaysia going forward with external demand very weak, and with the unlikelihood that demand for electronics will recover anytime soon."
BACKGROUND
- Malaysian export growth could slow further due to a deepening global economic downturn and weakening commodities prices, economists have said.
- The Southeast Asian economy is a net exporter of crude oil and a large producer of crude palm oil.
KUALA LUMPUR: The country's exports unexpectedly fell in October from a year ago, the latest evidence that it is being hit by falling demand from abroad because of the global economic slowdown.
The 2.6% decline from a year ago compared with economists' expectations for a 6.3% rise in a country where trade is more than 100% of gross domestic product, or the value of all goods and services produced.
"We are likely to see much weaker numbers for Malaysia going forward with external demand very weak, and with the unlikelihood that demand for electronics will recover anytime soon," said Alvin Liew, an economist at Standard Chartered.
Exports dipped slightly in July 2007 but the last big fall was in March 2007 when they fell 4.5%.
Imports for October fell by 5.3% year-on-year compared with analyst expectations for a 1.8% rise.
The data comes after South Korea saw exports slide by 18.3% in November, the biggest drop in seven years, and amid tumbling oil and commodity prices, key exports for Malaysia.
Exports totalled RM53.46 billion, down from RM62.31 billion in September, while imports fell to RM43.84 billion.
That ate into the trade surplus, which fell to RM9.62 billion in October compared with RM14.5 billion in September.
Malaysia has pinned its hopes of avoiding a recession on boosting exports to Asia, although the October data showed exports to the 10 countries that make up Asean fell by 6.1% from a year ago and exports to China fell to RM4.89 billion from RM5.26 billion on weaker commodity and oil prices.
Malaysia hopes to record economic growth of 3.5% in 2009, but many economists say it will not manage that. Investment bank UBS sees no growth at all.
The poor trade data may spur Malaysia's central bank into action after its first rate cut in five years earlier this month when it shaved 25 basis points off its key rate to 3.25%.
"The central bank will look into at least another 25 basis points. I'm looking at 50 basis points in January and February," said Gundy Cayhadi, economist at IDEAglobal.com. -- Reuters
KUALA LUMPUR, Dec 4 (Reuters) - Malaysia's exports unexpectedly fell 2.6 percent in October from a year earlier due to weakening global demand for electronics and commodities, the government said on Thursday.
Imports dropped 5.3 percent from a year ago, according to government data.
*************************************************************
KEY POINTS:
- A Reuters survey of economists had predicted annual export growth of 6.3 percent for October and import growth of 1.8 percent.
- For the full story on the October trade data, please double-click on
ANALYST COMMENTS:
GUNDY CAHYADI, ECONOMIST, IDEAglobal.com
"The export growth numbers will be very low. It will remain in the low single digit and possibly (be) negative figures. It will stay like that at least until the second half of next year. Commodities prices have been slowing. That held Malaysian exports strong in Q2 and somewhat in Q3. The central bank will look into at least another (interest rate cut of) 25 basis points. I'm looking at 50 basis points (cut) in January and February."
ALVIN LIEW, STANDARD CHARTERED BANK
"We were definitely expecting some easing off of growth in exports in October but the magnitude of the fall was certainly a surprise to us and to the market as well.
"We do know two things probably affected the numbers: one was the strong base effect in October 2007 and two, the sustained decline in global commodity prices.
"For a large part of the year, Malaysian exports have shown healthy growth largely due to strong commodity exports compared to say, Singapore. But we are now starting to see the impact of declining commodity prices.
"We are likely to see much weaker (exports) numbers for Malaysia going forward with external demand very weak, and with the unlikelihood that demand for electronics will recover anytime soon."
BACKGROUND
- Malaysian export growth could slow further due to a deepening global economic downturn and weakening commodities prices, economists have said.
- The Southeast Asian economy is a net exporter of crude oil and a large producer of crude palm oil.
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