Thursday, 15 June 2017

(NST) Consumer spending holding up with quickened retail, motor vehicle sales: Maybank IB

KUALA LUMPUR: Retail and motor vehicle sales quickened in April compared to a year ago, indicating that consumer spending is holding up in early second quarter of 2017.

Maybank Investment Bank said the retail trade growth suggests real private consumption growth momentum was sustained after the 6.6 per cent growth recorded in the first quarter.

The Statistics Department said wholesale and retail trade stood at RM92.8 billion in April 2017, registering 9.6 per cent growth from wholesale Trade (RM45.2 billion), retail trade (RM36.3 billion) and motor vehicles (RM11.4 billion) businesses.

“The faster retail trade growth coincided with the increase in income as indicated by the manufacturing sector’s average salaries and wages which gained 7.7 per cent year-on-year (from 5.5 per cent in March),” noted Maybank.

Inflation also moderated in April to 4.4 per cent after surging to the high of 5.1 per cent in March.

Motor vehicle trade growth eased for a second month in April in line with the slowing growth of related indicators like total industry vehicle (TIV) sales and the banking system’s disbursement of passenger car loan.

The research house’s auto sector analyst expects TIV in May to hover around similar level in April (42,746 units) before picking up in June leading up to the Hari Raya festivity where sales are commonly made.

“The second half would likely see better TIV especially for marques with scheduled new launches (Perodua) supported by facelift models in the mass-market segment (Perodua Axia and Bezza).”

Consumer spending this year, added Maybank, is also supported by tourist spending.

This was despite the weak first quarter whereby inbound tourist arrivals fell -0.5 per cent year-on-year as credit card spending in Malaysia by foreign cardholders surged by 18.8 per cent last quarter and increased further by 25.6 per cent in April.

Tourist arrivals are expected to rise in the second half of the year as Malaysia plays host to events such as the 2017 SEA Games and Para-Asean Games.

Spending by foreign tourists account for 10 per cent of consumer spending and 6 per cent of GDP in 2016.