SINGAPORE - Export growth in Singapore clocked a strong showing last month, led by non-electronic shipments and with support mainly coming from the volatile pharmaceuticals sector again.
The Republic's non-oil domestic exports (NODX) rose 8.3 per cent from a year ago in September, up from 5 per cent in August, with expansion in non-electronic exports outweighing a dip in electronics.
This figure, however, remained below analysts' expectations of 11.1 per cent growth, according to a Bloomberg forecast poll.
Last month's growth could be due to some re-routing of trade routes for production done between the United States and China, OCBC Bank's head of treasury research and strategy Selena Ling told The Straits Times.
"If you look at China's trade surplus data for September, it is also very obvious that there is still a lot of frontloading that is ongoing, ahead of further tariffs that are to come," she said.
She is referring to an increase in levies that US President Donald Trump intends to impose on US$200 billion (S$275 billion) worth of Chinese products, come January 2019.
Singapore's non-electronic exports grew by 11.9 per cent in September, up from a 7.8 per cent increase the month before, with pharmaceuticals, non-monetary gold and food preparations contributing the most to this.
Electronic Nodx declined 0.9 per cent year-on-year as well, following a 1.5 per cent dip in August. Contributing the most to this slip were shipments of personal computers, diodes and transistors, as well as parts of integrated circuits.
Its year-on-year growth has also been in negative territory since last December, with analysts expressing concern over fallout from heightening trade tensions between the US and China.
"I think the days of double-digit declines, hopefully, seem to be over," said Ms Ling. "But I don't think we will see a sharp pick-up yet, not with the general growth environment softening and the uncertainty around when the US-China trade war will be resolved."
On a seasonally adjusted month-on-month basis, NODX declined 4.3 per cent in September, after a 0.4 per cent growth in August - due to a drop in both electronic and non-electronic exports.
However, NODX to the top 10 markets rose overall in September, with exports to the US, Europe and Thailand in the lead.
Shipments to other areas such as China, South Korea, Japan, Malaysia and Hong Kong, however, fell.
UOB senior economist Alvin Liew noted the "shifting importance of export destinations".
While exports to China dropped 17.8 per cent from the year before, with declines in both electronics and non-electronics,shipments to the US jumped 41.5 per cent overall.
"It is notable that exports to China again contracted for the fifth consecutive month and suffered significant declines, while NODX to South Korea also endured another bad month," said Mr Liew.
"The NODX declines to North Asia may be correlated with the global tech cycle slowdown, while stronger exports to the US reflect the robust economic outlook and final demand in the US," he added.
"If this trend persists, then developed economies, led by the US, may again overtake China as far as Singapore's export destination is concerned."
He noted that ongoing trade tensions will cloud the outlook for a very trade-dependent Singapore.
Nomura research analysts Euben Paracuelles, Brian Tan and Charnon Boonnuch added that it does not expect NODX growth to sustain at such levels, as the favourable comparison to exports during the same period last year is set to reverse in October.
Total trade increased by 13.5 per cent in September, up from 13.3 per cent growth from the year before in August.
Non-oil re-exports rose by 13.3 per cent in September, slightly lower than the 14.1 per cent increase in August, also mainly due to growth in the non-electronic sector.
Meanwhile, oil domestic exports rose by 14.7 per cent in September, following a 35.9 per cent expansion in the preceding month, with higher sales to Malaysia, Hong Kong and Australia.