Yesterday’s trade report was mildly positive, with both exports and imports showing faster growth (log annual and monthly changes; seasonally adjusted):
The reason why I’m saying mildly positive is that there’s no clear evidence that growth will get any better as yet. As far as I’m concerned, external trade growth hasn’t gone anywhere this past year, and the ups and downs we’ve seen this year is no more than “noise”.
There’s some clues in the disaggregated trade data for the next couple of months – intermediate imports are down while capital goods imports are up (RM millions):
The implication is that manufactured exports will probably turn down again, but Malaysia’s year-long investment boom is likely to continue. So domestic demand in the form of capital expenditure will help sustain the economy even as external demand remains weak.
Meanwhile, Malaysian electrical and electronics exports continues their terminal decline (RM millions):
As a percentage of total exports, E&E exports are now less than 32%:
It’s still a hefty portion of Malaysian export receipts, but has not been a contributor to growth for more than half a decade.
November 2012 External Trade Report from MATRADE