Malaysian Exports Fall Most Since 2002 on Electronics

By Shamim Adam and Michael Munoz

Jan. 7 (Bloomberg) -- Malaysia’s exports fell the most in almost seven years in November as recession in its biggest markets eroded demand for electronics goods and commodities.

Overseas sales dropped 4.9 percent from a year earlier to 51.79 billion ringgit ($14.8 billion) after slipping 2.6 percent in October, the trade ministry said in a statement in Kuala Lumpur today. The median estimate in a Bloomberg News survey of 11 economists had been for a 5.7 percent decline.

The global economic slump is hurting orders at the Malaysian factories of companies such as Dell Inc. and Intel Corp., forcing some to shut plants and cut jobs. The government, which expects growth in 2009 to be the slowest in eight years, will introduce more measures to stimulate the economy if necessary, Prime Minister Abdullah Ahmad Badawi said Dec. 31.

“It is a concern that demand within Asia has apparently moderated,” said Gundy Cahyadi, an economist at IDEAglobal in Singapore. “Further shrinkage in exports would only add pressure to the government to react decisively on the economy.”

Singapore, Japan and the U.S., the nation’s biggest export destinations, are all in recession. Singapore’s economy may contract as much as 2 percent this year, the government said last week, and manufacturing is shrinking from China to Australia.

Malaysia’s exports to the U.S. dropped 17 percent to 6.3 billion ringgit in November from a year earlier amid a decline in electrical and electronics shipments, the ministry said today.

Electronics Slide

Japan in November overtook the U.S. as Malaysia’s second- biggest export destination. Overseas shipments to the world’s largest economy have been slipping since 2007 when the U.S. was Malaysia’s biggest export market.

Shipments of electrical and electronics goods, which made up about 40 percent of total exports in November, slid 10.6 percent from a year earlier.

Manufacturers in Malaysia are cutting jobs as demand for their products fall. Western Digital Corp., the world’s second- largest maker of hard-disk drives, last month said it may shutter or sell a plant in Malaysia. About 5,000 workers, mostly from the electronics industry, may be laid off this quarter, Human Resources Minister S. Subramaniam was cited by the Star newspaper as saying on Dec. 22.

Palm oil sales abroad fell 19.1 percent in November as prices eased from record highs reached earlier last year. Malaysia is Southeast Asia’s second-largest oil and gas producer and the world’s No. 2 palm oil seller.

Outperformer

Still, Malaysia’s economic expansion probably outperformed most other Asian nations last quarter, and may continue to do so in the coming months, said Robert Prior-Wandesforde, an economist at HSBC Group Plc in Singapore.

“We expect Malaysian GDP growth, at 2.8 percent in 2009, to be towards the top of the Asian growth league,” he wrote in a report today. That compares with the government’s forecast that gross domestic product will expand 3.5 percent this year.

Imports dropped 8.6 percent in November to 40.29 billion ringgit, leaving a trade surplus of 11.49 billion ringgit. Exports grew 12.1 percent in the first 11 months, while imports expanded 5.9 percent, leaving a trade surplus of 130.33 billion ringgit.

To contact the reporter on this story: Shamim Adam in Singapore at sadam2@bloomberg.net