Exports continued to disappoint for the second straight month in March, hit by a triple whammy of high base effects, cooling electronics demand and a strengthening Singdollar.
The decline comes at a time when global trade tensions continue to mount, which could have repercussions on a small, trade-dependent nation like Singapore.
Even so, economists expect shipments to grow for the rest of this year, albeit at a more muted pace compared with last year's whopping double-digit increases.
Official data out yesterday showed non-oil domestic exports (Nodx) fell by 2.7 per cent last month, lower than already muted economist expectations of a 1.2 per cent growth. But this still fared better than February's revised contraction of 6 per cent - the first decline after four months of growth.
Economist said March's export decline was a culmination of several ongoing trends.
Headline figures were weighed down, thanks to last year's high base and the translation effects from the Singdollar's appreciation against the greenback.
The moderation of electronics shipments from last year's breakneck pace is also in line with economist projections.
"The decline in Nodx in March is not surprising as exceptionally strong demand for manufacturing output is difficult to sustain. The saving grace appears to be the more moderated decline in Nodx compared to the previous month," noted Dr Tan Khay Boon, senior lecturer at SIM Global Education.
Electronics Nodx - a key economic driver this past year - fell 7.1 per cent in March, easing from the 12.7 per cent fall in February.
Non-electronics Nodx also fell last month, but by a milder 1.3 per cent compared with the 3.3 per cent decline in February.
Economists were cautious about the outlook but believed exports will regain ground this year.
"Manufacturing growth will likely remain positive, but ease to the low single digit by the year end," said Maybank economists Chua Hak Bin and Lee Ju Ye.
United Overseas Bank economist Francis Tan concurred that export growth is likely to slow. He maintains a Nodx forecast of 6.5 per cent, down from 8.8 per cent last year.
But not all market watchers are so upbeat. Nomura economists Euben Paracuelles and Brian Tan see the Singapore economy as "susceptible to any escalation in trade protectionism or a tech cycle downturn". They said: "Overall, we continue to believe the weak Nodx data reflects poor export competitiveness, which has been eroded by high labour costs."
Economists cited the trade dispute between China and the United States as a key downside risk to Singapore's exports.
Businesses also expressed concern on this front. Singapore Manufacturing Federation president Douglas Foo said the sabre-rattling by the two superpowers has caused firms to become "jittery". But he noted: "Businesses should always be prepared for cycles... I think it (Singapore's exports) will stabilise eventually."