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THE movement of cargoes and containers in and out of Port Klang, Malaysia, can be seen as a barometer of the country's economic health as it is the gateway to the nation's trading activity.
According to the Port Klang Authority (PKA), container throughput for exports grew 8.74 per cent quarter on quarter (q-o-q) to 758,267 TEU in Q2, 2023, while container throughput for imports increased 5.69 per cent q-o-q to 752,704 TEU, reports The Edge Malaysia.
The container throughput performance at Westports Holdings Bhd has been encouraging so far despite the slowing global economy. In the second quarter of the year, the company handled 2.7 million TEU, compared with 2.55 million TEU in the first quarter, a 5.49 per cent increase.
On a year-on-year (y-o-y) basis, Westports handled 7.38 per cent more containers in the first half of this year at 5.24 million TEU, compared with 4.88 million TEU in the previous corresponding period, as economic activities in the Far East resumed post-Covid-19.
This performance led to the port operator's executive chairman Datuk Ruben Emir Gnanalingam's more favourable outlook for the economy compared to earlier this year.
"We have been cautious the whole year because we felt that the macroeconomic aspects of the global economy were not strong, but there're so many mixed signals. So, you can't tell how it [the economy] is going to behave," Mr Gnanalingam said.
"You have high inflation and then you have high interest rates, but unemployment is still low, so you are not really losing consumption, which normally happens when this [high inflation followed by high interest rates] happens."
To put things into context, the Malaysian economy grew at a slower pace of 2.9 per cent y-o-y in the second quarter of 2023, compared with 5.6 per cent y-o-y in the first quarter. However, on a quarter-on-quarter basis, the economy grew 1.5 per cent in Q2 this year, compared with 0.9 per cent in Q1.
Westports' container volume performance so far this year should provide an encouraging outlook for the economy as a whole. This is because the central region, which Port Klang serves, still has the biggest share of the country's GDP.
Mr Gnanalingam, who is also group managing director of Westports, notes that container volumes to and from the US and Europe have been down this year, but "not in a very crazy way".
"You have to remember during the Covid-19 years, volume grew a lot in many places because of extra goods moving around for pandemic reasons and also because of work-from-home and whatever other reasons. So, goods were moving, and therefore any slowdown that we've seen was probably just an adjustment back to normal," he said, adding that he does not see a recession in the short term.
"The whole year I was cautious of potentially seeing one [a recession] but as the year progresses, it doesn't seem that one is coming. I hope I'm not jinxing it by saying this but the whole year, I was saying it might come. But now, I don't know if it is going to come."
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