Strong Growth Rate Set To Ease In 2015
Activity levels at Malaysia's main ports will grow moderately in 2015, on the back of continuing economic expansion and a good trade performance. Gross tonnage and container volume growth will pick up as both exports and imports continue to grow, despite a slight easing of domestic consumption. Port Klang and Port Tanjung Pelepas will also benefit from expansion projects and developments over the last two years. Tonnage growth at both will lag slightly behind GDP, with box traffic growth leading GDP and, in the case of Port Klang, exceeding 7%.
The Malaysian economy surged ahead in 2014, driven forward by strong export demand and dynamic domestic consumption. Although we remain positive in our outlook for 2015, we believe one of those two engines of expansion - the domestic consumer market - is going to lose some of its vigour. GDP grew by 6.2% in Q114 and by 6.4% in Q214, persuading us to raise out estimate for full calendar 2014 growth to 5.8% (up from 4.5% previously). Our forecast for 2015 is that growth will ease back to a slower, but still impressive 4.2%.
We think export growth will remain pretty strong, as there is evidence of a sustained recovery in global demand for electronics and semi-conductors, both key products of the Malaysian manufacturing sector. However, we do expect government action to cool the boom in the domestic consumer market, particularly given the relatively high levels of household debt. The authorities have already sought to reduce liquidity in the market, and a tightening of interest rates to restrain inflationary pressure is on the cards.
Headline Industry Data
The real value of Malaysia's total trade will rise by 4.5% in 2015, marginally down on the 4.7% rate estimated for 2014.
Total cargo volume handled at Port Klang will rise by 1.4% to 202.33mn tonnes in 2015, while volume at the port of Tanjung Pelepas will rise by 3.7% to 131.02mn tonnes.
2015 box traffic at Port Klang is...