Published July 6, 2009

Export sales in later quarters to improve: MAEI

By PAULINE NG
IN KUALA LUMPUR

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THE Malaysian American Electronics Industry (MAEI) has projected that the global economic slump would dampen sales of its member firms by an estimated 27.5 per cent this year to RM54.6 billion (S$22.53 billion).

But the bleakest months appear to be over. Releasing highlights of its annual survey yesterday, MAEI chairman Wong Siew Hai said that its members expect to post higher export sales of 15-20 per cent in the second quarter over the first, and another 10 per cent increase in the third quarter.

The coming quarters are expected to be better because of two main factors: the stimulus packages implemented by governments in Asia, especially China, as well as world-wide consolidation activities that have benefited its members.

'I am happy to report that most companies are now returning to normal working hours. Some limited and selective hiring is also taking place due to the increase in orders,' Mr Wong said, but noted that MAEI members remained cautious as much would depend on the pace of the global economic recovery.

The MAEI outlook is more bearish than the Semiconductor Industrial Association (SIA) forecast of a 22 per cent contraction in sales to US$195 billion this year. SIA expects 2009 to remain weak but believes growth next year would exceed 7 per cent.

The MAEI saw some other positives in the crisis for its members, noting some have recently reported additional responsibilities in areas such as design and development (D&D), procurement, financial services, IT and HR shared services.

An industry committee of the American Malaysian Chamber of Commerce, the MAEI is a big player in the electrical and electronics (E&E) sector and employs over 56,000 workers and contributes nearly 30 per cent of the total value of Malaysian E&E exports.

Its companies are expected to spend RM960 million this year in D&D activities and have invested more than RM3 billion in over the past three years.

Its forecast coincided with the release of Malaysia's export figures for May which showed a 4.5 per cent month-on-month improvement to nearly RM43 billion. This was mainly on the back of higher manufactured exports, including electrical & electronic products. E&E exports in May totalled nearly RM18 billion and accounted for 41 per cent of total exports.

But compared to last May, total exports were down by almost 30 per cent, and indicates global demand is still tight. Month-on-month, imports were also down by 28 per cent, resulting in a trade surplus for May of RM10 billion.

Total trade in the first five months to May fell 25 per cent year-on-year to RM361 billion. In the same period, exports were lower by some 24 per cent to RM205.5 billion, while import contraction was 27 per cent. The total trade surplus up to May was RM50.12 billion.