KUALA LUMPUR (Aug 11): MIDF Research anticipates the outlook for distributive trade in Malaysia for the second half of 2017 to remain bright as upcoming festive seasons towards year-end are expected to boost consumer spending.

Retail sales in Malaysia saw its highest ever yearly growth performance in June, thanks to seasonal demand during the school holidays as well as the Hari Raya festive season, the research firm said.

The Statistics Department reported yesterday that retail trade grew 13.9% year-on-year to RM38.09 billion in June.

Meanwhile, wholesale trade in June 2017 rose 8.4% y-o-y to RM46.95 billion, sustaining its form above the 8% level since January this year. However, motor vehicles trade dipped 4.8% y-o-y to RM11.82 billion.

"Overall, this suggests an upward momentum in consumer spending which [drove] the domestic economy in recent months," MIDF Research said in a report today.

"We foresee in the second half, outlook shall remain bright given that upcoming festive seasons such as Deepavali and Christmas will occur during the half and plus long school holidays starting in November will drive up tourism activity.

"Continuous solid performance of distributive trade in June signals stronger domestic spending is in play and hence will drive Malaysia's economy into a better position in 2017 compared [with] last year in particular via private consumption and services sector," it added.

Retail, wholesale and motor vehicles sales combined, total distributive trade expanded by 8.6% y-o-y to RM96.86 billion, reflecting a solid growth backed by a surge in retail trade, said the research firm.

"As June came upon us, school holidays at the start and Eid al-Fitr in the closing of the month have been major factors in instigating demand, which has resulted in solid increase in sales of goods and services," said MIDF Research.

It also noted the strengthening labour market and stable wage growth as the driving factors behind the steady increase in consumer spending for June.