September 2010 External Trade

It’s hard to find anything positive to say about yesterday’s release of September trade numbers. There’s no longer the excuse of a short working month due to Ramadhan (log annual and monthly changes):

This marks the sixth consecutive month of a decline in exports, almost all of it attributable to falling electronics demand (log annual and monthly changes):

In terms of my forecasts, September’s numbers fell about in the middle of the lower half of the range forecasts (95% confidence interval), which imply only a 15%-20% chance of occurrence.

I’d expect a bounce up in October, but I’m wondering whether there will ever be a full recovery in E&E exports. If you look at the actual volume over the past ten years, outbound E&E manufacturing looks like an industry in slow decline (RM millions):

This is something I’ve been saying since 2007, but it’s one thing to forecast it and another to actually see it happen.

On to next month’s exports forecasts:

Seasonally adjusted model

Point forecast:RM51,279m, Range forecast:RM57,670m-44,888

Seasonal difference model

Point forecast:RM53,385m, Range forecast:RM60,872m-45,899m

Technical Notes:

September 2010 External Trade Report from MATRADE.