March 27 (Bloomberg) -- U.S. electronics makers in Malaysia including Intel Corp. and Motorola Inc. may report slower export sales growth this year amid faltering overseas demand, the head of an industry group said.

Exports by 17 U.S. companies in Malaysia may increase 7 percent to 8 percent this year, said Wong Siew Hai, chairman of the Kuala Lumpur-based American Malaysian Chamber of Commerce's electronics industry group. The chamber in July forecast 2006 sales to rise 9 percent to 72 billion ringgit ($21 billion).

``In terms of export value, it depends quite a bit on the U.S.,'' Wong said in an interview. Economists expect ``the U.S. economy to slow somewhat and this in turn may impact the global demand, and therefore our export value might come down.''

Malaysia's $147 billion economy grew 5.7 percent in the fourth quarter, the slowest pace in a year, as overseas sales eased. Exports are the biggest contributor to Malaysia's gross domestic product and economic growth, while manufacturing accounts for about a third of the economy.

``The slowdown in global electronics demand has been anticipated and should lead to an easing in Malaysia's manufacturing output,'' said Leslie Tang, an economist at UOB Kay Hian Pte in Singapore. Malaysia's ``GDP growth in 2007 would be driven by domestic demand, led by projects in the Ninth Malaysia Plan, as well as by oil and gas activities.''

Manufacturing growth may slow to 6.6 percent this year from 7 percent in 2006, as overseas shipments increase at a slower pace, the central bank said on March 21.

Government Spending

Exports are forecast to gain 8.2 percent this year to 637.2 billion ringgit, slowing from a 10.3 percent gain in 2006. Manufactured shipments, which make up about four-fifths of exports, may climb 8.1 percent, easing from 10.1 percent last year, the central bank said.

Still, Bank Negara Malaysia said it expects growth in Southeast Asia's third-largest economy to accelerate to a three- year high of 6 percent in 2007, spurred by higher investment and government spending, and a recovery in mining.

Prime Minister Abdullah Ahmad Badawi is counting on projects under a 200 billion ringgit, five-year development budget called the Ninth Malaysia Plan and lower corporate taxes to lift investment and construction as exports falter.

Overseas sales by U.S. electronics manufacturers in Malaysia last year probably grew ``close'' to the 9 percent estimated in the July survey, Wong said. The chamber hasn't completed its latest survey and doesn't have a final estimate for either 2006 or 2007 export growth yet.

Electronics sales this year would be aided by demand from China, India and other Asian markets, Wong said. Spending on information technology will grow globally, he said.

To contact the reporter on this story: Stephanie Phang in Kuala Lumpur at sphang@bloomberg.net.