Exports rebounded strongly in May after months of decline, but economists believe it is still too early to pop the champagne as the outlook remains murky.
Non-oil domestic exports (Nodx) surged 11.6 per cent last month over the same period last year - the best performance since the 18.5 per cent jump in March 2015.
It was a stunning turnaround from April, when Nodx - the main measure of shipments - slumped 7.6 per cent year on year.
On a month-on-month seasonally adjusted basis, Nodx rose 16.8 per cent to $14.8 billion in May following 4.5 per cent growth in April, thanks to an increase in both electronic and non-electronic exports.
The dazzling year-on-year expansion last month came largely on the back of a 19 per cent jump in non- electronic exports, led by the segments for prefabricated buildings, non-monetary gold and pharmaceuticals. This outweighed the decline in electronic exports, which continued to slide, sinking 6 per cent during the month, following a 7.4 per cent contraction in April.
Singapore's best markets in May were the United States, Taiwan and Malaysia, said trade agency IE Singapore yesterday.
Shipments to the US, for instance, grew 9.1 per cent year on year after shrinking 7 per cent in April.
It was an even bigger turnaround for Taiwan, with exports leaping 11.2 per cent last month after collapsing 22.5 per cent in April.
But several markets fared poorly, notably mainland China, with exports shrinking in May for the 11th straight month by 10.1 per cent, worse than the 7.4 per cent contraction in April.
Other laggards included South Korea, Hong Kong and Japan.
Economists agreed that last month's strong performance is unlikely to last.
Ms Selena Ling, OCBC's head of treasury research and strategy, noted that the spike was based on certain segments such as non-monetary gold exports, which are "not typically the first things that pop to mind as the traditional key exports for the Singapore economy".
She expects full-year Nodx growth to come in at negative 4.4 per cent, adding that it is premature to conclude that May's Nodx figure "heralds a strong turnaround export engine story that will last beyond a month or two".
UOB economist Alvin Liew added: "While we may yet see another strong month of gold exports in June as prices continue (to move) higher in the month while risk-off sentiments increase as we head into the UK's EU referendum, the outlook for the major segments of Nodx (electronics, chemicals and petrochemicals) still does not look positive."
In the same vein, Citi economist Kit Wei Zheng said the surprise headline numbers mask weaknesses in the export figures.
"We will not be surprised if these trends reverse in upcoming months," he said, noting that electronic exports remain weak, which will likely weigh on subsequent gross domestic product growth.
Last month, IE Singapore sharply lowered its forecast for exports for the year from an expansion of between zero and 2 per cent to a contraction of between 3 and 5 per cent.