PETALING JAYA: Distributive trade sales, a measure of activity across the retail, wholesale and motor vehicle businesses, are expected to remain a key support for domestic demand in the second half of 2026 (2H26) despite normalising household spending.<\/p>\n
Kenanga Research, which maintained its 2026 distributive trade growth forecast at 8.1%, compared with 5.6% in 2025, said resilient employment, income growth and tourism would continue to provide support.<\/p>\n
It noted that latest retail and wholesale data showed activities had moderated less than initially expected.<\/p>\n
\u201cRetail and wholesale trade have moderated less than initially expected, pointing to a reasonably firm domestic demand entering 2H26,\u201d it said.<\/p>\n
The research house sees some upside risk to its forecast, backed by stronger tourism-related spending, a resilient labour market and spillovers from export-oriented industries.<\/p>\n
However, three consecutive months of slower growth have kept it cautious, particularly as motor vehicle sales remain volatile due to several underlying factors.<\/p>\n
It also retained its 2026 gross domestic product (GDP) growth forecast at 5.3%, compared with 5.2% in 2025, saying recent data suggested the economy entered the second half from a position of strength.<\/p>\n
\u201cGrowth should moderate in 2H26 as consumer spending normalises and global uncertainties linger. Still, resilient domestic demand should continue to cushion the economy,\u201d it said.<\/p>\n
TA Research similarly expects domestic spending to remain on a positive footing, although momentum is gradually normalising after stronger expansion earlier in the year.<\/p>\n
It said the moderation in headline distributive trade index (DTI) growth was broad-based, while retail activity remained relatively steady and motor vehicle sales continued to recover on a monthly basis.<\/p>\n
For the first seven months of 2026, DTI expanded by an average of 4.7% year-on-year (y-o-y), with retail trade growing 4.4%, wholesale trade 5.2% and motor vehicle activity 4.9%.<\/p>\n
This suggests domestic demand remains reasonably broad-based rather than being driven by a single spending category.<\/p>\n
It expects household spending to remain an important growth anchor in the second half, supported by stable labour-market conditions, income growth and manageable inflation.<\/p>\n
However, consumption growth is likely to become more measured as households adjust to higher living costs and external uncertainty.<\/p>\n
TA Research maintained 2026 private consumption growth forecast at 4.8%, while warning that risks are slightly tilted to the downside if elevated global energy prices persist or subsidy rationalisation leads to a faster pass-through to household costs.<\/p>\n
Phillip Capital Research also expects labour-market conditions to underpin retail and wholesale activity, with sustained private consumption supporting broader economic growth.<\/p>\n
In July 2026, Malaysia\u2019s unemployment rate remained low at 3%, while total employment continued to trend higher.<\/p>\n
Wage growth in the manufacturing sector, however, eased slightly to 2.8% y-o-y from 3.1% in June.<\/p>\n
Still, Phillip Capital expects wage growth to strengthen in the coming months alongside an accelerated expansion in the manufacturing sector.<\/p>\n
\u201cOverall, stable employment and wage growth should continue to support retail sales activity,\u201d it said.<\/p>\n
BIMB Research was more upbeat, maintaining 2026 distributive trade growth forecast at 8.6%, supported by stronger-than-expected wholesale activity, resilient retail spending and improving vehicle sales.<\/p>\n
\u201cThe broad-based strength in both business and consumer spending reinforces our view that Malaysia\u2019s economy remains on track to grow by 5.5% in 2026, with third-quarter 2026 GDP likely staying above 5%,\u201d it said.<\/p>\n
It expects growth to moderate as inventory restocking normalises, but sees domestic demand remaining supported by a stable labour market, low inflation, rising real incomes and a stronger ringgit.<\/p>\n
The latest data showed distributive trade sales eased for a third straight month to 9% y-o-y in July, from 10.1% in June, marking the slowest pace in five months.<\/p>\n
On a month-on-month basis, however, sales rebounded 1.2% after contracting for two consecutive months, while sales value rose to RM170.5bil from RM168.5bil and remained above the year-to-date monthly average of RM167.2bil.<\/p>\n","protected":false},"excerpt":{"rendered":"PETALING JAYA: Distributive trade sales, a measure of activity across the retail, wholesale and motor vehicle businesses, are…\n","protected":false},"author":2,"featured_media":771003,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1319,1294,2184,138084,2023,56,54,55,76665],"class_list":["post-771002","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-consumer","tag-economy","tag-gdp","tag-motor","tag-retail","tag-uk","tag-united-kingdom","tag-unitedkingdom","tag-wholesale"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/771002","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=771002"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/771002\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/771003"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=771002"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=771002"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=771002"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}