Singapore's exports have presented a puzzle of sorts to economists in the past couple of years.
Non-oil domestic exports (Nodx) to other countries have been persistently tepid despite a pick-up in the global economy, including in Singapore's major markets - Europe and the United States. Compounding the mystery is the fact that local factories have stayed busy, with manufacturing output on the rise even as exports are falling.
Data from trade agency IE Singapore last Thursday showed that Nodx tumbled an unexpectedly sharp 6.6 per cent in March over a year ago.
This was much worse than economists' forecasts of a mere 0.8 per cent dip and reflected lower demand from a worrying eight of Singapore's top 10 markets.
Although it followed an 8.9 per cent rise in February, that month's increase was off a low base. In the last 12 months, Singapore's Nodx has grown over the previous year only twice, in December and February.
Hopes that these recent climbs finally heralded an upswing for exports were somewhat dashed by last month's dismal showing. As has been the pattern for the past two years at least, electronics shipments were a particular disappointment, slumping 16.1 per cent in March over a year ago.
In contrast, the other tech-focused exporters in the region performed well.
South Korea's exports rose 5.2 per cent in March from a year earlier following a 1.5 per cent gain in February. Taiwan's shipments grew 2 per cent last month over a year ago, beating forecasts.
Some economists have concluded that Singapore's poor export showing is proof of its declining competitiveness vis-a-vis its neighbours.
But that does not explain the other curious part of the export puzzle, which is why factories here are continuing to churn out a rising number of products despite falling exports.
The local Purchasing Managers' Index, a gauge of the manufacturing sector's health, has shown growth in manufacturing activity - including new orders and inventories - almost constantly over the last year. Actual manufacturing production has also enjoyed a rising trend in the last 12 months.
Since most factory output is produced for export, the twin trends of rising production and falling exports seem inconsistent.
Possible answers have been proferred. In February, the Ministry of Trade and Industry (MTI) said some factories may be building up inventories ahead of stronger demand that has yet to show up.
Increasingly, more of what electronics firms "produce" here are also high value-added activities, such as design or research, while their actual products are made in other countries. The design and research would be captured as electronics output for Singapore without a corresponding increase in electronics exports, the MTI said.
Last week, economists offered another good reason: that Nodx, which most economic observers use as shorthand for Singapore's exports, may not in fact be the best indicator of what the Republic is selling to the world.
Nodx measures products that are classified as being made, assembled, processed or in some other way transformed in Singapore.
But there are two other main components of Singapore's total exports: services exports, which could account for activities such as design and research; and non-oil re-exports (Norx), which refers to goods imported into Singapore and then re-exported out in the same form. Norx would include products that are imported and then re-packed, divided into smaller lots or sorted here for re-export. These two other components may be becoming more important contributors to Singapore's total exports.
In March, Nodx in absolute terms fell to $13.2 billion, the lowest level since January 2010.
Norx, on the other hand, shot up to $20.3 billion, the highest seasonally adjusted level since 2003, IE Singapore told The Straits Times.
Just as Nodx fell in eight of the 10 top markets, Norx rose in eight of the 10 top markets.
Barclays economist Leong Wai Ho said this could be due to more products being classified as Norx rather than Nodx.
On the back of the political turmoil in Thailand, some manufacturers could have diverted part of their production to Singapore.
"This means that some components are made in Singapore but are shipped back to Thailand for final assembly and testing and, as a result, may not meet the required level of Singapore content to be classified as Nodx," Mr Leong said.
"This would also explain the increasing divergence between electronics output and Nodx that started last year."
As for services exports, they have been growing more strongly than goods exports in the last decade. In 2004, exports of goods were five times as large as exports of services; last year, the gap narrowed to three times.
This reflects how Singapore's services exports have grown 140 per cent in the period, compared with the 56 per cent expansion in goods exports.
In other words, the Nodx numbers may not be giving a full picture of external demand for Singapore's manufacturing activities. To get a better sense of how Singapore's exports are doing, one has to look at all three types of exports as a whole.