No sigh of relief yet for Malaysia's export industry

 A 1.6% improvement from April's export performance is in the offing but analysts say this "growth" is largely the result of low base effect.

Malaysia's export dipped into negative growth territory at -0.1% in March. April's results may see improvements. However, DBS analysts forecast this is just temporary. Downside risks in the global environment are forecasted to make things worse before it gets any better. 

Here's more from the DBS Group Research:

April trade is due this 7 June 2012 and after dipping into negative growth territory for the first time since Nov09 in March, a modest improvement is expected. Headline export growth is likely to register 1.6%, up from -0.1% in the previous month. Imports will probably rise by 4.2%, which should thus imply a trade balance of MYR 9.9bn.

However, the so called improvement is largely the result of low base effect. Sequentially, a contraction of about 3-4% is expected. It's probably time the authority considers releasing trade and industrial production data in month-on-month basis to provide a better reflection of the current economic conditions.

As it is, downside risks in the global environment have once again re-emerged. The shift in political stance across Europe is heading for a collision with the demand and expectation from the financial market. Things may get much worse before it gets any better. Moreover, economic outlook across the Atlantic is not great either. The US economy at best is just muddling through and the recovery has been fragile. With that, expect more downsides to Malaysia's export data in the months to come.