KUALA LUMPUR: Hong Leong Investment Bank (HLIB Research) said that steady commodity prices and the global manufacturing sector's rebound, which is demonstrated by the purchasing managers index (PMI) for manufacturing and semiconductor sales, should lead to further improvements in Malaysia's trade.
Exports of produced goods and goods related to commodities have both improved, according to the research firm.
"Manufactured exports saw a recovery, driven by increased exports of machinery, equipment, metals, optical devices, and chemical products.
"The decline in exports of electrical and electronic (E&E) also slowed down, reflecting a global increase in semiconductor sales," it added.
Commodity-related exports, including petroleum products, palm oil, and rubber, saw growth, offsetting declines in crude petroleum and LNG exports, said HLIB Research.
"Imports growth accelerated across different categories, including capital goods, intermediate goods, and consumption goods," it added.
The firm also noted that exports in January saw a significant improvement, growing by 8.7 per cent compared to the previous year, bouncing back from a 10-month decline.
"This surpassed the expected 3.0 per cent growth. Imports also increased by 18.8 per cent year-on-year (YoY), showing strong momentum compared to the previous month's 2.9 per cent growth," it added.
The research note stated both exports and imports increased on a monthly basis, although the rise in imports was higher (5.3 per cent) than that of exports (3.4 per cent), resulting in a slightly smaller trade surplus of RM10.1 billion compared to RM11.7 billion in December.
Exports to major markets like the US, Japan, EU, and ASEAN countries rebounded, but exports to China declined further due to lower exports of E&E products.
The bank said in January, Malaysia's trade performance saw improvement, aided by the presence of more working days compared to the previous year.
This was attributed to the earlier occurrence of the Lunar New Year in January 2023, which resulted in fewer working days during that period.
"Following this, we maintain our expectation for GDP to grow by 4.8 per cent YoY in 2024," it added.
