KUALA LUMPUR (9 Feb): Malaysia’s wholesale and retail sales value in December 2021 rose 3.5% to a record high of RM120.5 billion from a year earlier , the Department of Statistics Malaysia (DOSM) announced on Wednesday (February 9th).
The previous high of RM117.6 billion was recorded a month earlier in November.
“The 3.5% increase in wholesale and retail trade in December was attributed to the retail trade sub-sector which recorded positive growth with an increase of RM3 billion or 3.5% to record RM48.5 billion,” DOSM Chief Statistician Datuk Seri Dr. Mohd Uzir Mahidin said in a statement.
“Wholesale also increased by 4.1% or RM2.3 billion to reach RM57.6 billion.
“During the same period, (sales value) of motor vehicles increased by 1.5% or RM 0.2 billion to reach RM 14.5 billion,” said Mohd Uzir.
However, while the wholesale and retail trade volume index increased by 0.6% year on year for December, the seasonally adjusted volume index decreased by 0.4% month on month. the other from November 2021, as seasonally adjusted wholesale and retail trade volume declined, offset by improved motor vehicles seasonally adjusted volume.
The latest data brings 4Q2021 year-on-year sales value growth to 5.1% and growth for full-year 2021 to 4.4% year-on-year – the latter supported by improving wholesale trade (6.4%) and retail trade (4.4%), although the figures for motor vehicles fell (-8.2%).
As for the pre-pandemic comparison, the automotive sector remained below the 2019 figure with a contraction of 2%.
MIDF Research sees retail up 5.5% in 2022
Growth in the value of distributive trade sales in December 2021 of 3.5% year-on-year was a moderation from 6.5% in November 2021. In a research note, MIDF Research said that despite the growth moderate, all three components improved on a consecutive monthly basis.
“Expansion of distribution trade sales among others [was] fueled by a modest recovery in the labor market and the reopening of national economic activities,” the research house said.
“The slowing factors could be due to the perception of high inflationary pressure and the effects of flooding,” he added.
On the outlook, MIDF Research said consumer spending is expected to remain on an upward trajectory for 2022, supported by significantly high vaccination rates, improving labor markets, fiscal incentives and steady inflationary pressure.
“We expect retail to grow by 5.5% in 2022. Easing of containment measures, economic reopening and gradually improving macroeconomic data are preparing for strong household consumption in 4QCY21 as well as in 2022.
“We expect private consumption to grow 6% for 2022. With interstate travel allowed, we expect the service sector to benefit and grow 7.1% for 2022,” he said.
MIDF Research said the Omicron wave and inflation risks will continue to influence consumer activities.
“Nevertheless, we believe that the disappearance of base effects and the evolution of bottlenecks in the global supply chain, as evidenced by the improvement in the Baltic Dry Index and the pressure from the global supply chain, will eventually reduce the pressure on general consumer prices in the future,” he said.
Moreover, the imminent reopening of borders could be a catalyst for the tourism industry.
However, the research house does not expect the borders to be fully reopened in the 1st half of 2022, as the Ministry of Health expects daily infection cases to peak at 22,000 by the end of March 2022, while the deployment of the vaccine for children aged 5 to 11 only started in February. 2022.
It may take at least a month and a half for this demographic to be fully vaccinated, he said.