While it may see drastic in terms of the pace of moderation, an eight plus percent increase in exports is still pretty commendable considering the dire external economic conditions. Import growth should come in at about 4.0%, which should imply a trade surplus of MYR 9.7bn.

So it’s not all gloom and doom for Malaysia, at least for the time being. Industrial production expanded more than expected in the same month, coming in at 2.8% against expectation of just 1.6%. Demand from Asia, particularly China, for commodities are keeping the external engines from stalling.

However, key electronics industry has continued to slump against a disappointing festive season demand. The recent October US SEMI book-to-bill and global semiconductor sales figured may have improved but it remains to be seen whether this marks the bottom of the current cycle. More importantly, the decline in PMIs of key export markets such as Singapore, China and Europe are certainly hinting on more downside risks to export growth.

Note that China’s manufacturing PMI is indicating a contraction in the sector. And this is the first time since Feb09 that the leading indicator has dipped below the crucial 50 mark. In short, the waning global demand is bound to take a toll on Malaysia’s export performance going forward.