The pain for exporters continued in August with shipments down for the sixth consecutive month. Signs that the worst is over are now being offset by fresh geopolitical concerns that could hurt trade.
Non-oil domestic exports (Nodx) fell 8.9 per cent from the same month last year, but they did manage to break out of a five-month-long slump of double-digit declines, according to data out yesterday.
It was also the second month in a row that the extent of the decline has eased: Shipments had plunged 17.4 per cent in June - the worst drop in six years - but that moderated to a fall of 11.4 per cent in July after figures were revised.
Last month's slump of 8.9 per cent - under the 10.6 per cent fall predicted by experts in a Bloomberg poll - was another step on the sector's long road to recovery.
But new worries over a messy Brexit and tensions in the Middle East have emerged - just as the damage inflicted by the trade war is starting to be contained.
CIMB Private Banking economist Song Seng Wun said: "There is still pressure on the export side, but the rate of contraction might be starting to narrow. Our numbers are consistent with what we see around the world. It is some small cheer since the trade war started to escalate."
HSBC chief Asean economist Joseph Incalcaterra said: "This reduces the likelihood of a further contraction in manufacturing output in the third quarter, meaning that Singapore may avoid technical recession this year."
Electronic products were the main culprit in last month's slump, declining 25.9 per cent over the same month last year, similar to the 24.2 per cent decrease in July.
Non-electronic exports dipped 2.2 per cent last month, an improvement from the 6.7 per cent decline in July.
Pharmaceuticals contributed the most to the drop, shrinking 23.6 per cent, followed by petrochemicals and primary chemicals.
Exports to most of Singapore's top markets fell, except for China. The largest contributors to the decline were Hong Kong, with shipments down 32 per cent, the United States, at a 15 per cent drop, and Malaysia, which was down 19.7 per cent.
OCBC Bank's head of treasury research and strategy Selena Ling said it remains to be seen if the rebound in China export figures can be sustained.
"At this juncture, it is difficult to determine how much of the pickup was due to front-loading activities ahead of the Sept 1 tranche of US tariffs against Chinese imports, or whether it was due to the lower Nodx base in the second half of last year," she noted.
Maybank Kim Eng economists Chua Hak Bin and Lee Ju Ye said the improvement in Nodx figures might also be inflated by a surge in gold exports to China.
They also suggested that the protests in Hong Kong may have disrupted ports and transport last month, which could help explain plunging exports to the territory.
Overall, analysts said the future remains murky owing to shifting geopolitical conditions.
Dr Tan Khay Boon, senior lecturer at SIM Global Education, said: "In view of the US-China trade dispute (being) far from settled, the increasing confrontational tendency between the US and Iran, escalated oil prices, Brexit getting messier, and anxiety in Hong Kong and Indonesia, it is too early to say that the worst is over."
United Overseas Bank economist Barnabas Gan said future export numbers may hinge on how long the US-China trade tensions last.
Last month, Enterprise Singapore slashed its Nodx forecast to minus 9 per cent to minus 8 per cent for the year, down from the range of minus 2 per cent to 0 per cent that was revised in the first quarter.
This came on the back of exports in the second quarter contracting 14.6 per cent from a year earlier.