The prevailing narrative I see in the media these days – both mainstream and online – is that the economy is in trouble, and we’re doomed unless the government does something (alternatively: we’re doomed unless we change the government).
I don’t know; the numbers are painting an entirely different picture. The angst is partly a function of price increases, which have squeezed wallets across the country. It’s also I suppose a function of which sector you’re working in and whether labour is sharing in the money coming in.
DOS I think has been working overtime – one of the items on my wish list of statistics we have for Malaysia is retail sales. Voila, it’s now here (warning: pdf link), along with data for wholesale and motor vehicle sales (index data is available here). Just as important, we’ve now got aggregate wage data for all three subsectors, important for tracking worker compensation, which AFAIK is also the first time this has been added to the distributive trade report.
Released at the same time is data for the construction sector, with sadly the wage data still missing. Nevertheless, I’m sure that’s on the way (fingers crossed). I haven’t had the chance to really tabulate the data yet – hence no charts – but the numbers indicate a fairly healthy economy:
- Retail sales rose a blistering 10.5% on the year;
- Wholesale trade rose 6.9%
- Construction output (already high) grew 11.3%
Only motor vehicle sales could be considered disappointing, growing just 4.0%, though that could be blamed on the price shock from the 20 sen petrol price increase, which came in September.
Here’s the interesting bit – wage growth in distributive trade looks pretty healthy. Average wage growth in 2012 hit 7.1%, and 6.0% in 2013. That well exceeds sales per worker of 4.2% (2012) and 3.7% (2013). Data on manufacturing sales and wages shows the same characteristic – not only is average income growth exceeding sales growth (i.e. labour income is increasing faster than labour productivity), but its also exceeding the overall rate of inflation.
So where does this meme that income growth in Malaysia is stagnant and the economy is in trouble comes from? I could blame inequality, but disaggregated household income data suggests otherwise – income growth has been across the board. It’s also possible that inflation in specific urban areas like KL and Penang generally exceed overall urban inflation, but that’s hard to substantiate without the data. And rabble-rousing by the opposition, as suggested by some, sounds ridiculous to my ears – the angst is too widespread. Then there’s of course the suspicion that DOS is fiddling the figures, but that sounds even more ridiculous – if it was true, we’d never see prices increase, or output drop, at all.
Whatever the case, the economy is keeps chugging along.