Singapore's non-oil domestic exports (Nodx) grew at a single-digit pace last month after a double-digit jump in the month before.
Shipments were driven mainly by non-electronic goods such as non-monetary gold, specialised machinery and pharmaceuticals.
Nodx rose 6 per cent year on year last month after a revised 13.9 per cent expansion in June and a 4.6 per cent drop in May, Enterprise Singapore (ESG) said yesterday.
The gain last month was higher than the 4.4 per cent jump predicted by economists in a Bloomberg survey.
Nodx has now increased in five out of the seven months of this year, a robust performance when compared with only one month of gain last year.
Mr Irvin Seah, senior economist at DBS Bank said: "This can be seen as the start of a normalisation process, where exports will flatten out to a more sustainable level."
However, he noted, the global outlook remains highly uncertain and challenging.
"While we believe Nodx growth will remain positive on an average basis in the coming months, some gyrations could still be expected from time to time. This is partly attributed to the volatile nature of the pharmaceutical cluster, which is the key driver of overall Nodx performance thus far," he said.
On a month-on-month seasonally adjusted basis, Nodx rose 1.2 per cent last month, after the previous month's 1.4 per cent decline. The growth in non-electronic domestic exports outweighed the decline in electronics.
Nodx growth slowed down on a three-month moving average year-on-year basis as well. The increase averaged 4.6 per cent last month after the 5.9 per cent gain in June.
On a year-on-year basis, non-electronic Nodx rose by 6.9 per cent last month, following the 11.7 per cent expansion in the previous month.
Contributing the most to last month's exports gains, non-monetary gold shipments surged 227.9 per cent, specialised machinery rose 60.1 per cent and pharmaceuticals were up 15.5 per cent.
Last month's gain in non-monetary gold shipments was aided by a low base in July last year when non-monetary gold exports declined 3.1 per cent.
Excluding gold, Nomura International said, Nodx would have contracted by 5.9 per cent year on year.
Gold exports have soared and will continue to do so this year due to the increase in demand for physical bullion as a safe-haven asset amid global economic uncertainty and the coronavirus pandemic.
Fitch Solutions recently revised up its 2020 gold forecast to US$1,850 per ounce compared with US$1,680 previously, after market prices breached an all-time high of US$1,900 last month.
ESG data showed gains in specialised machinery and pharmaceutical exports were also helped by their low bases last year.
Electronic Nodx grew by 2.8 per cent last month, less than the low-base driven expansion of 22.2 per cent in the previous month.
Disk media products, telecommunications equipment and integrated circuit shipments increased by 23 per cent, 18.2 per cent and 1.5 per cent last month, respectively.
Explaining the low base for electronics, ESG said domestic exports of disk media products declined by 25 per cent in July last year amid the global electronics downcycle.
Still, electronics, pharmaceuticals and chemicals accounted for 61 per cent of Singapore's exports last month and are likely to drive future growth.
Ms Lee Ju Ye, economist at Maybank Kim Eng Securities, said: "We reiterate our positive outlook on exports, as Singapore rides on resilient demand for electronics, which is 22 per cent of Nodx, and pharma, which is 10 per cent of the total."
She said manufacturing will likely escape recession as exports and regional trade recover through this year.
"The improving performance of regional export powerhouses in July, including China, Vietnam, South Korea and Taiwan, signals an encouraging start to the third quarter," she noted.
Nodx to the top markets as a whole grew last month, though exports to Indonesia, Thailand, Hong Kong, China and the EU 27 declined.
Exports to China fell 5.1 per cent last month, after a 0.6 per cent increase in June. Electronic Nodx to the world's second-largest economy was down 16.3 per cent last month.
The markets that accounted for most of the growth in last month's Nodx were led by the United States (+98.7 per cent), South Korea (+56.3 per cent) and Taiwan (+18.7 per cent).
Electronic Nodx to the US surged 28.5 per cent last month, the most among Singapore's top 10 markets.
Ms Selena Ling, head of treasury research and strategy at OCBC Bank, said the US had already overtaken China as Singapore's top Nodx market based on the first half of this year.
The US now has an 18 per cent share of Singapore Nodx, compared with China's 13.5 per cent.
"This is a reversal of 2019, when China held pole position with a market share of 17.3 per cent, while the US was in second place with 13.1 per cent," she said.
The Government last week raised Singapore's 2020 trade forecasts, predicting Nodx to grow by 3 per cent to 5 per cent year on year, compared with an earlier forecast for a 1 per cent to 4 per cent fall.
ESG said last Tuesday that its upgrade was based on the better-than-expected performance for specific products, such as non-monetary gold, pharmaceuticals and electronics.
But it cautioned that the global economic outlook remains uncertain.