ELECTRONICS exports have so far this year remained sluggish with the weak global external demand and the scene is likely to continue into 2012.
"We expect the global demand to continue sliding at least till mid-next year before a more pronounced improvement in growth momentum sets in," DBS Bank said.
The Purchasing Managers' Index, an indicator of the external orders, pointed towards that direction, it added.
Apart from a slight improvement in the US ISM manufacturing index, PMIs for Singapore, China and the eurozone have dipped.
For the first time since 2009, China's PMI has fallen below the crucial 50 mark, which signifies a contraction in the sector.
"Plainly, there are downside risks facing Malaysia export-oriented sectors and we expect this to be manifested in the headline numbers in the coming months," remarked economist Irvin Seah.
Until the demand weakness recovers or the supply glut diminishes, the decline in electronic sales is expected to remain entrenched.
"While the most recent October US SEMI book-to-bill has improved and that the decline in global semiconductor sales has eased, it remains to be seen whether this marks the bottom of the current down-cycle.
"In our opinion, this upside blip is most likely a result of a temporary restocking to make up for the shortfall in inventories due to earlier destocking process."
Seah added that demand for palm oil, liquefied natural gas, crude oil and petroleum products has been less elastic and has helped the commodity segment weather this global slowdown relatively well.
Export sales have been kept afloat due to commodity exports which have propped up overall export performance since the third quarter of 2010.
"While we expect commodity exports to remain in the driving seat on the external front in the quarters to come, much will really depend on whether commodity prices will hold up... and this will depend on global economic conditions going forward."