Business Opportunity

The wood-based industry contracted by 6% (January-July 2004: 17.8%). Within the industry group, sales of plywood moderated to 2.5% (January-July 2004: 25.3%) while sales of windows and doors and joinery works contracted by 1.9% (January-July 2004: 19.5%). Unlike the Electronic and Electrical industry which was affected by slowdown in demand, contraction in wood-based industry was affected by the shortages in supply of raw materials, in particular supply of sawn rubber wood used by furniture manufacturers. Effective 8 June 2005 , the Government banned the export of rubber wood sawn timber to alleviate the supply shortage in the country as well as to intensify downstream value added activities of the wood based industry, such as engineered solid or hardwood flooring, windows, doors and joinery works. As a wood-renowned manufacturer meet the continuing demand for high quality furniture and products, Malaysia is migrating to produce high-end wood-based product inputs.

World economic growth, which had recovered a thirty-year high of 5.1% in 2004, is estimated to moderate to 4.3% in 2005. Global growth continues to be led by China and US, with growth rates of 9% and 3.5%, respectively. Most countries in emerging Asia are expected to post satisfactory growth rates, albeit below 2004 levels. The recovery in Japan is envisaged to continue to be sustained, underpinned by rising corporate investment and private consumption as well as a rebound on exports. Performance in the Euro area is anticipated to improve, although differing widely across the region, as the weak Euro boosts export competitiveness.

(Source: Economic Report 2005/2006)