Prospects for Singapore's export sector are looking far rosier now, thanks to a better-than-expected performance from industries such as pharmaceuticals and electronics in the second quarter.
The improved sentiment here is reflected more broadly, with global trade unlikely to reach the worst-case scenario projected earlier by the World Trade Organisation (WTO), Enterprise Singapore (ESG) said yesterday.
The more optimistic outlook has prompted the agency to raise Singapore's trade forecasts, with non-oil domestic exports (Nodx) now predicted to grow by 3 to 5 per cent over last year - a stark reversal from the -4 to -1 per cent decline it predicted in May.
Also, total merchandise trade is now tipped to shrink at a slower pace of 8 to 10 per cent, from the -12 to -9 per cent slump indicated in May.
Nodx for the second quarter also came in better than expected, albeit from the low base a year ago, largely bolstered by non-electronics such as non-monetary gold and pharmaceuticals.
Shipments increased 6.5 per cent in the three months to June 30 over the same period last year and improved on the 5.4 per cent year-on-year growth in the previous quarter.
But total merchandise trade fell 15.2 per cent, reversing the 0.5 per cent gain in the first three months of the year.
Oil shipments contracted by 61.9 per cent year on year on the back of lower crude prices, continuing the 15.9 per cent slide from the previous quarter, while non-oil trade fell by 3.3 per cent.
The WTO has affirmed that trade volumes are now unlikely to reach the worst-case scenario of a 32 per cent contraction projected in April, ESG noted.
While global trade fell sharply in the first half of the year, the contraction was tempered by rapid government responses, it added.
Higher shipments of disk media products and telecommunications equipment helped lift electronics exports by 10.6 per cent year on year in the second quarter, after a 2.3 per cent dip in the first.
Non-electronics Nodx were buoyant as well, up 5.4 per cent thanks to higher contributions from non-monetary gold, pharmaceuticals and specialised machinery.
Overall, shipments to Singapore's major trade partners grew in the second quarter, with the United States, Japan and South Korea among the biggest customers, although exports to China, Hong Kong, Indonesia, Malaysia and Thailand declined.
On a quarterly basis, Nodx fell 2.4 per cent in the second quarter in contrast to the 7.3 per cent expansion in the first three months of the year.
Total services trade contracted 22.2 per cent year on year in the second quarter, continuing the first quarter's 3.2 per cent decline.
Total services trade came in at $107 billion for the quarter, with service exports contracting 20.3 per cent, while imports dipped 24.1 per cent.
The decline in service exports was attributed to the decrease in travel receipts, transport service exports, and receipts from maintenance and repair services.