Friday, October 4, 2013

August 2013 External Trade

Well, well, well…(log annual and monthly changes; seasonally adjusted):


For what’s seems like the first time in the longest time, the external trade picture looks bullish. Exports climbed 11.7% in log terms for August, while imports 13.6%. Just as significantly, monthly growth stayed positive as well.

Even better, electrical and electronic exports were also in positive territory (log annual and monthly changes; seasonally adjusted):


That’s the first positive annual growth reported for E&E since June 2012, and the highest growth figure since February 2012. Non-E&E exports climbed as well, reaching 13.7% in log terms. You can’t blame it on prices either, because only energy prices trended up in August, with most other commodities seeing prices declining.

On the import side, despite higher growth, the picture is one of relative stability (RM millions):


Consumption imports is still in its long term uptrend channel, but both intermediate and capital goods imports look pretty flat to me. We had a reduction in intermediate imports dating from last year, but it seems to have more or less recovered.

So is everything on the mend? The biggest jump in August shipments were to ASEAN, China and Europe, so that’s a qualified yes. US orders were down, but that’s not necessarily telling anything – as part of the East Asian supply chain, Malaysia’s direct exports to the US says little about the strength of US demand. Much of it could be routed through Singapore or China.

I’d also note that the first week of August was the end of fasting month, and a week long break thereafter for many. That usually coincides with weaker shipments, just like post-CNY periods. Nor can I necessarily discount the exchange rate as being a catalyst – there’s been a 7% drop in the NEER since May, and 4% since December 2012.

So things appear to be looking up – finally.

Technical Notes:

August 2013 External Trade report from Matrade

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