Quick takes: Singapore's export engine roars on for now but risks remain

Singapore's non-oil domestic exports grew for the fifth straight month, rising by 16.5 per cent year on year in March.
Singapore's non-oil domestic exports grew for the fifth straight month, rising by 16.5 per cent year on year in March.PHOTO: AFP

SINGAPORE - Singapore's non-oil domestic exports grew for the fifth straight month, rising by 16.5 per cent year on year in March.

Growth was above analyst consensus expectations of a 7.3 per cent gain. The expansion follows from the 21.1 per cent year on year rise in February, which was the fastest in five years.

On a month on month basis, Nodx declined 1.1 per cent, reversing the 1.1 per cent growth in January.

The improvement in March shipments was due to gains in both electronic and non-electronic exports. Electronic sales rose 5.2 per cent year on year, easing from the 17.2 per cent surge in February, while non-electronic exports swelled by 20.8 per cent, after the 22.7 per cent expansion in the previous month.

Here are some quick reactions from economists:

UOB economist Francis Tan:

"Looking ahead, overall Nodx expansion remains strongly supported by electronics exports. The 5-month on-year gains in electronics exports was a result of past months of higher manufacturing activities and inventory accumulation in the semiconductor segment (semiconductor production was on a 12-month streak of double digit expansion). In addition, the past 8 months of expansion (after an 18-month consecutive decline) in the new export orders for electronics PMI points to a more sustained pickup in Singapore's electronics exports at least in the first half of 2017.

"Indeed, past few months of trade pickup looks set to bring Singapore's 2017 Nodx to finally expand, after recording four previous years of contraction. That said, we are carefully watching the negative impact from the anti-globalisation rhetoric that has been fueling developed markets' sentiments. One country to watch out is still the US. In a paper by the Ministry of Trade and Industry, the US is the 2nd largest source of final demand of the goods produced in Singapore and further trade-protectionistic measures will only hurt the path of our export recovery.

"IE Singapore had their forecast for Nodx to grow by 0 to 2 per cent in 2017...while we maintain our forecast of 2017 Nodx growth at 0.7 per cent."

OCBC Bank head of treasury research & strategy Selena Ling:

"Nodx growth in the first quarter of 2107 was already a stellar 15.4 per cent year on year (yoy) and given the low base in 2016 (-2.8 per cent yoy), there are some upside risks to our full-year Nodx growth of 0-2 per cent yoy."

ANZ economist Ng Weiwen:

"Noteworthy to me, China's "demand" (not necessarily final demand) continues to drive the recent export upswing in emerging Asia outside China. This is reflected in today's Nodx numbers for Singapore, which is amongst the first economies in the region to report March export numbers."