KUALA LUMPUR (Feb 9): Malaysia's December 2021 wholesale and retail trade sales value increased 3.5% to a record high of RM120.5 billion from a year earlier, the Department of Statistics Malaysia (DOSM) said on Wednesday (Feb 9).

The previous high of RM117.6 billion was recorded a month earlier in November.

“The increase of 3.5% for wholesale and retail trade in December was attributed to the retail trade sub-sector which recorded a positive growth with an increase of RM3 billion or 3.5% to register RM48.5 billion,” DOSM chief statistician Datuk Seri Dr Mohd Uzir Mahidin said in a statement.

"Wholesale trade also expanded by 4.1% or RM2.3 billion to RM57.6 billion.

"Within the same period, (sales value of) motor vehicles went up 1.5% or RM0.2 billion to RM14.5 billion," Mohd Uzir said.

However, while the wholesale and retail trade volume index rose 0.6% year-on-year for December, the seasonally adjusted volume index fell 0.4% month-on-month from November 2021 as wholesale and retail trade seasonally adjusted volume fell, offset by improved motor vehicles seasonally adjusted volume.

The latest data brings 4Q2021 sales value y-o-y growth to 5.1%, and full-year 2021 growth to 4.4% from the year before — the latter underpinned by improvement in wholesale trade (6.4%) and retail trade (4.4%) although motor vehicles figures dropped (-8.2%).

As for pre-pandemic comparison, the motor vehicle sector remained below the 2019 figure with a contraction of 2%.

The December 2021 distributive trade sales value growth of 3.5% y-o-y was a moderation from 6.5% in November 2021. In a research note, MIDF Research said that despite the moderating growth, all three components improved on a sequential month basis.

“Expansion of distributive trade sales among others [was] fuelled by modest recovery in the labour market and reopening of domestic economic activities,” said the research house.

“The dragging factors could be due to high inflationary pressure perception and flood effects,” it added.

On the outlook, MIDF Research said that consumer spending is set to stay on an upward trajectory for 2022 underpinned by significantly high vaccination rates, improving labour market, fiscal incentives and stable inflationary pressure.

“We forecast retail trade to expand by 5.5% in 2022. Relaxations of containment measures, economic reopening and progressive improvements in macroeconomic data are staging for a strong consumer spending in 4QCY21 as well as for 2022.

“We forecast private consumption to expand by 6% for 2022. With interstate travels allowed, we project the services sector to benefit and increase by 7.1% for 2022,” it said.

MIDF Research said the Omicron wave and inflation risks will continue to influence consumption activities.

“Nevertheless, we opine the fading away base effects and the developments in the global supply chain bottlenecks as reflected in the improving Baltic Dry Index and Global Supply Chain Pressure Index will eventually reduce the pressure on general consumer prices going forward,” it said.

Additionally, the looming border reopening could be a catalyst for the tourism industry.

However, the research house does not see borders to be fully reopened in 1H2022 as the Ministry of Health has forecast daily infection cases to peak at 22,000 by end-March 2022 while the vaccine roll-out for children aged 5 to 11 only started in February 2022. 

It may take at least one and a half months for that demographic to be fully vaccinated, it said.