KUALA LUMPUR: Malaysia's distributive trade sales value for the month of May expanded by 6.8 per cent year-on-year (YoY) to RM110.8 billion, a four-month high compared to 5.6 per cent recorded in April.
The broad-based expansion led by sales of motor vehicles, said Kenanga Investment Bank Bhd in a report today.
Sales of motor vehicles strengthened to 9.1 per cent YoY compared to 2.2 per cent in April, a record 9-month high mainly reflected by festive season promotional campaign during the month.
In a similar trend, wholesale trade inched up to 5.5 per cent from 5.3 per cent in April, whereby the increase is seen in food, beverages & tobacco (8.0 per cent), household goods (6.6 per cent) as well as agricultural, raw materials & live animals (5.6 per cent).
Retail trade also registered an expansion in May, it grew by 7.8 per cent YoY from 7.0 per cent in April, led by sales of food, beverages & tobacco in specialised store (9.6 per cent), as well as sales of other goods in specialised stores (9.3 per cent) and non-specialised stores (9.0 per cent).
However, the research firm said the pace of growth in the first two months of the second quarter (2Q) of 2019 (April and May) remained below the first quarter (1Q) 2019 average growth of 8.7 per cent, suggesting a weaker private consumption growth in the 2Q19 as spending is expected taper off in June.
"Overall, we maintain our projection that distributive trade sales to expand within the range of 6.0-6.5 per cent in 2019 as compared to 8.2 per cent in 2018, reflecting the high base effect associated by policy measures, as well as softer domestic demand against the backdrop of global economic slowdown and looming external uncertainties arising from the US-China trade war.
"This is in line with our projection of a slower value-added private consumption growth of 6.7 per cent in 2019 (2018: 8.0 per cent) which correspond to our lower gross domestic product (GDP) growth projection of 4.5 per cent for 2019," Kenanga report said.