Non-oil exports down for 9th straight month, but drop less than expected

Shipments were down 5.9 per cent last month, following a revised 12.5 per cent plunge in October.
Shipments were down 5.9 per cent last month, following a revised 12.5 per cent plunge in October.PHOTO: ST FILE

Exporters had another grim run in November - the ninth consecutive month of decline - but the slide was less than expected thanks to a small rally in the non-electronics sector.

Overall shipments of non-oil domestic exports (Nodx) were down 5.9 per cent last month, following a revised 12.5 per cent plunge in October, Enterprise Singapore data showed yesterday.

This was the best showing since February and beat a forecast of a 6.4 per cent year-on-year fall in a Bloomberg poll of analysts.

Non-electronics exports returned to growth for the first time since February, with a 1.3 per cent improvement owing to stronger shipments of non-monetary gold, specialised machinery and non-electric engines and motors.

But electronic product exports plunged 23.3 per cent - or $1 billion - from a year ago, worse than the 16.4 per cent drop seen in October.

Integrated circuits, personal computers and disk drives contributed most to the decline.

United Overseas Bank (UOB) economist Barnabas Gan said that although the plunge in electronics exports may seem alarming, it comes off a high base a year earlier. Also, in value terms, these exports recorded the highest level in 10 months at $3.4 billion.

"So, it seems like demand for Singapore products has improved, which is comforting," he noted.

Maybank Kim Eng analysts Chua Hak Bin and Lee Ju Ye said the year-on-year decline in electronics exports was exaggerated by "front-loading" of orders late last year after US President Donald Trump threatened further tariff hikes.

Exporters shipped larger quantities of goods as companies brought forward orders to beat future tariffs. "We think the electronics downturn is past its worst and a recovery, albeit sluggish, is under way," they said.

"A partial US-China trade deal will help revive capital expenditure and exports, and electronics exports will likely emerge out of contraction by early 2020."

On a month-on-month seasonally adjusted basis, exports improved 5.8 per cent last month, after weakening 3.1 per cent in October.

This was thanks to more shipments of both electronic and non-electronic products.


Exports to most of Singapore's top markets fell last month on a year-on-year basis, except to the United States, Thailand and Indonesia. The biggest contributors to the decline were Hong Kong, the European Union and China.

On the other hand, exports to emerging markets grew by 4.4 per cent, in contrast to the 26.6 per cent contraction in October. The lift was mainly due to Cambodia, Laos, Myanmar, Vietnam, the Middle East and Latin America.

Oil domestic exports sank 27.5 per cent year on year last month, while non-oil re-exports grew 2.4 per cent.

Overall, both total imports and total exports decreased last month, but by less than the declines in October. As a result, total trade slid 5.9 per cent year on year.

Last month, Enterprise Singapore cut its Nodx forecast for 2019 to between minus 10 per cent and minus 9.5 per cent, a further downgrade from the previous minus 9 per cent to minus 8 per cent range.

But it expects Nodx to pick up next year, with growth in the range of zero to 2 per cent on the back of a gradual recovery in electronics.

JPMorgan analyst Ong Sin Beng expects technology to help buoy exports in the first quarter next year as global capital spending gradually recovers.

UOB's Mr Gan noted: "Industrial production figures have also improved, which tells us that manufacturers have a rosier trade outlook, because why produce when you can't sell."

A version of this article appeared in the print edition of The Straits Times on December 18, 2019, with the headline 'Non-oil exports down for 9th straight month, but drop less than expected'. Print Edition | Subscribe