Economic Update
Local
Malaysia External Trade - Upside surprise in exports
Tue, 20-Oct-2026 07:09 am
by To Zheng Hong • Apex Research

• Exports surged +54.5% YoY in September (Aug: +45.4%), while imports accelerated to +52.7% (Aug: +41.1%). The trade surplus widened to RM33.7bn (Aug: RM28.1bn).

• Manufacturing led export growth, while commodity exports improved.

• Sustained growth in intermediate imports points to robust manufacturing activity ahead.

• We raise our 2026 export growth forecast to +35.1% YoY (previously: +26.2%), reflecting stronger-than-expected YTD growth momentum.

• Downside risks include prolonged Middle East tensions and continued uncertainty surrounding US trade policy.

 

Another month of positive surprise

Malaysia’s exports surprised to the upside in September, surging +54.5% YoY (Aug: +45.4%) and beating Bloomberg consensus of +39.9%. Import growth also accelerated to +52.7% (Aug: +41.1%), driven by stronger intermediate and consumption goods imports. Consequently, the trade surplus widened to RM33.7bn (Aug: RM28.1bn). On a YTD basis, exports and imports grew +34.0% and +25.7% respectively (9M25: +5.0% and +4.1%).

 

Broad-based improvement

Manufacturing exports accelerated to +58.6% YoY (Aug: +50.4%), led by sustained E&E strength (+69.2%; Aug: +66.5%) amid the AI-led global tech upcycle. Non-E&E manufacturing also gained momentum (+46.2%; Aug: +35.1%), driven by petroleum products (+33.2%; Aug: +21.7%), machinery, equipment & parts (+38.4%; Aug: +27.8%) and optical & scientific equipment (+43.2%; Aug: +23.5%).

Commodity exports also improved. Mining exports surged +56.3% YoY (Aug: +43.3%), supported by a sharp rebound in crude petroleum exports (+68.9%; Aug: -19.3%), while LNG remained firm (+45.7%; Aug: +51.8%). Meanwhile, agriculture exports declined at a slower pace (-5.7%; Aug: -21.6%), as palm oil exports fell at a more moderate rate (-9.1%; Aug: -25.1%). 

By destination, exports to Taiwan (+175.2% YoY; Aug: +102.2%), the EU (+35.3%; Aug: +28.4%) and China (+22.1%; Aug: +19.9%) strengthened. Exports to the US remained robust (+89.9%; Aug: +130.4%), albeit at a slower pace. Within ASEAN, exports to Thailand (+57.3%; Aug: +33.2%) and Vietnam (+55.0%; Aug: +28.3%) accelerated, while shipments to Singapore (+50.4%; Aug: +58.4%) and Indonesia (+9.5%; Aug: +11.5%) moderated.

 

Intermediate imports reaffirm manufacturing momentum

Capital goods imports continued to expand (+20.9% YoY; Aug: +37.2%), pointing to sustained investment activity. Meanwhile, intermediate goods imports recorded double-digit growth for the fifth consecutive month (+69.6%; Aug: +50.5%), signalling robust demand for industrial inputs and sustained manufacturing activity ahead. Consumption goods imports also rebounded (+18.2%; Aug: -1.7%).

 

Raising export forecast

We raise our 2026 export growth forecast to +35.1% YoY (previously: +26.2%), reflecting stronger-than-expected 9M26 growth momentum of +34.0% YoY. We remain positive on E&E exports, underpinned by the global tech upcycle and structural demand for AI-related applications. Meanwhile, LNG exports should remain resilient, supported by elevated oil prices and potential trade diversion arising from the Middle East conflict. Robust intermediate imports also point to a firm manufacturing orderbook and near-term support for export activity. 

Nonetheless, export growth is likely to moderate going forward amid an unfavourable high base effect. Downside risks remain, particularly from prolonged Middle East tensions that could disrupt global trade flows and continued uncertainty surrounding US trade policy. Malaysia also remains exposed to higher US tariffs, pending the outcome of the ongoing Section 301 investigation into excess capacity.

Sentiment: Positive
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