Non-oil exports' 10% fall worse than analysts expected

Integrated circuits, disk media products and parts of integrated circuits contributed the most to the electronics slump, while the non-electronics dip was due mainly to a plunge in pharmaceuticals shipments.
Integrated circuits, disk media products and parts of integrated circuits contributed the most to the electronics slump, while the non-electronics dip was due mainly to a plunge in pharmaceuticals shipments. PHOTO: ST FILE

Forecast was 4.6% drop; Enterprise Singapore notes high-base effect

Singapore's non-oil domestic exports (Nodx) fell 10 per cent year on year last month, continuing a downtrend that saw shipments slump 11.8 per cent in March.

Enterprise Singapore noted the high base from a year ago as it released the export data yesterday.

The March figure was the biggest year-on-year monthly fall in Nodx since the 12 per cent fall in October 2016, and came on the back of the biggest year-on-year drop in electronics exports since 2013.

Last month's showing was worse than the 4.6 per cent drop expected by analysts polled by Bloomberg, with both electronic and non-electronic exports shrinking.

The electronics exports sector extended a year of contraction, with a 16.3 per cent fall, following the 26.7 per cent plunge in March.

Integrated circuits (minus 21.2 per cent), disk media products (minus 31.3 per cent) and parts of integrated circuits (minus 51.7 per cent) contributed the most to the electronics slump.

Integrated circuits, disk media products and parts of integrated circuits contributed the most to the electronics slump, while the non-electronics dip was due mainly to a plunge in pharmaceuticals shipments.
Integrated circuits, disk media products and parts of integrated circuits contributed the most to the electronics slump, while the non-electronics dip was due mainly to a plunge in pharmaceuticals shipments. ST PHOTO: GAVIN FOO

Non-electronic exports declined 7.9 per cent, after a 7.1 per cent drop seen in March. This was mainly due to a 46.6 per cent plunge in pharmaceuticals shipments, a volatile export segment which shrank 36.5 per cent last month.

ING Asia economist Prakash Sakpal called the latest figures "yet another disappointing export result".

"Singapore is among the front-line Asian economies to face the brunt of the recent escalation of trade tensions between the US and China," he said.

He added that the impact of a deteriorating external environment has been seen in steeper manufacturing contraction driving a gross domestic product (GDP) slowdown in the first quarter of this year.

He also said that the data foreshadows a continued slowdown in manufacturing and GDP growth.

As a result of weak activity, he expects the Singapore central bank to ease monetary policy.

Dr Chua Hak Bin, senior economist at Maybank Kim Eng, said manufacturing will likely remain weak in the second quarter.

"Escalating US-China trade tensions are dashing hopes for a trade recovery in the second half of the year," he said.

Dr Chua pointed, in particular, to the global electronics sector, where he expects US export controls against Chinese tech firm Huawei to disrupt the tech supply chain.

Singapore's non-oil exports to the majority of the top markets, except for Hong Kong and the United States, shrank last month, said Enterprise Singapore yesterday.

Exports to the EU fell the most, by 25.4 per cent, following March's 15.1 per cent contraction.

Another market that saw a large plunge was Japan (minus 31.1 per cent), while Malaysia saw a drop of 13.6 per cent and shipments to China, Singapore's biggest export market, shrank 5.8 per cent.

Exports to the US, the third-biggest destination, grew 2.2 per cent year on year last month, after rising 23 per cent in March.

On a month-on-month seasonally adjusted basis, Nodx declined by 0.6 per cent last month, following the previous month's 14.3 per cent contraction.

A version of this article appeared in the print edition of The Straits Times on May 18, 2019, with the headline 'Non-oil exports' 10% fall worse than analysts expected'. Print Edition | Subscribe