Recently published research from Business Monitor International, "Malaysia Freight Transport Report Q1 2014", is now available at Fast Market Research
[ClickPress, Thu Dec 19 2013] China Slowdown Has An Impact On Malaysia
Second quarter economic growth in Malaysia came in under expectations largely, we think, because of the impact of slower Chinese growth on Malaysian exports. Q213 GDP growth was 4.3% year-on-year, down on Bloomberg consensus forecasts of 4.8%. BMI believes we have yet to see the worst of China's economic slowdown, meaning that Malaysia's export drive will remain somewhat subdued. While net exports are acting as a drag on growth, there are still some bright spots in the country's outlook, with both investment and domestic consumption looking strong. Construction activity is likely to be on the up, as many public sector infrastructure projects, part of the government's Economic Transformation Programme (ETP), have been scheduled to start up during H213. There is also a healthy pipeline of private sector investment projects. Household consumption is also holding up well, boosted by low unemployment (at a historic low of around 3%). Taking these factors into account, we are maintaining our GDP growth forecast at 4.6% in 2013, followed by 4.6% again in 2014.
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Activity levels across Malaysia's different freight modes will grow in a rough 2%-4.0% range in 2014, lagging a little the growth rates achieved by the wider economy and the foreign trade sector (4.0%-4.4%). However, as infrastructure investment plans are advancing, Malaysia will be gradually expanding its freight capacity.
Headline Industry Data
* The real value of Malaysia's total trade will rise by a predicted 4.1% in 2014, picking up from the estimated 3.8% expansion experienced in 2013.
* Total cargo volume handled at Port Klang will rise by 2.8% to 209.3mn tonnes in 2014, while volume at the Port of Tanjung Pelepas will rise by a marginally higher 3.0% to 126.5mn tonnes.
* Rail freight volume is projected to rise 2.2% to 6.379mn tonnes in 2014 and to average 3.1% annual growth in the five-year period to 2018.
* Air freight volume is set to grow by 1.9% to 945,000 tonnes in 2014, on a par with the growth rate achieved in 2012. Average growth in the next five years will be 1.9% per annum.
Key Industry Trends
Industry Lobbies Highlight Logistics Issues: Malaysia's logistics system is weak, inefficient, and fragmented, according to Abdul Rahman, chairman of the Asia Logistics Council (ALC). Rahman said there were only 19 to 20 'clusters' in the entire logistics value chain in the country. 'From the government bodies responsible for licensing to the port authorities, freight forwarders, trucking system, incoming port system -we are so fragmented' he said. In his view the logistics sector was the weakest of the four pillars of the country's international trade system, the others being finance, commerce and insurance.
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