April 2011 External Trade: Marking Down

Seems like someone made a mistake somewhere, as both February and March export data were revised downwards by about RM2 billion or so, although import data remained the same. Quite a lot as revisions go, but there was that one year when they missed an entire port’s worth of trade…

The upshot of it all is trade growth doesn’t look quite so hot as it did last month (log annual and monthly changes; seasonally adjusted):

The drop in monthly import growth is especially worrying – the last time that happened (3Q 2010), the economy actually shrank. This isn’t a good start going into the second quarter of 2011.

The problem’s almost entirely in electronics exports (log annual and monthly changes; seasonally adjusted):

We’re talking here about a more than 10% annual drop two months running. Incidentally, this illustrates one of the key problems with using statistical models to generate forecasts – your forecasts are only as good as your data.

As imports have fallen, next month’s numbers are likely to be worse:

Seasonally adjusted model

Point forecast:RM58,975m, Range forecast:RM66,396m-51,554m

Seasonal difference model

Point forecast:RM55,550m, Range forecast:RM63,414m-47,686m

Technical Notes:

April 2011 External Trade Report from MATRADE.