SINGAPORE - Exports performed better than feared, though numbers continued to fall by double digits for the fifth straight month, dragged down especially by the electronics slump.
Non-oil domestic exports (Nodx) fell by 11.2 per cent in July, according to Enterprise Singapore data on Friday (Aug 16). Bloomberg pollsters had expected worse, tipping the Nodx drop at 15.4 per cent.
On a month-on-month basis, July exports reversed June's 7.8 per cent fall with growth of 3.7 per cent.
Exports had plunged a revised 17.4 per cent year on year in June - the biggest drop since shipments sank 33.2 per cent in February 2013.
CIMB Private Banking economist Song Seng Wun said that June's plunge could be "the bottom of the current cycle, but double digit declines might persist over the next few months".
"Leading indicators such as orders are still weakening," he said.
Year on year, electronic exports shrank by 24.2 per cent in July, following the 31.9 per cent drop in June, while non-electronic exports declined 6.6 per cent in July, easing from the 12.6 per cent fall in June.
The fall in non-electronic exports was led by pharmaceuticals (-32.7 per cent), specialised machinery (-31.3 per cent) and primary chemicals (-30.9 per cent).
Exports to all of Singapore's top 10 markets fell as well, except to the United States. Leading the decline were falling shipments to Japan, Malaysia and Hong Kong.
Exports to emerging markets also declined by 29.6 per cent last month, following a 17.0 per cent fall in June.
Ms Selena Ling, head of treasury research and strategy at OCBC Bank, said the US market remains insufficient to buffer the Nodx declines in the other major markets. She noted that the driver for Nodx to the US market came from non-electronics exports (+18.3 per cent) whilst electronics exports remained weak (-8.8 per cent).
Going forward, she said the “macro headwinds remain intact for now”, referring to the ongoing US-China trade war stalemate, heightened uncertainties over the tech cycle, the rising risk of a no-deal Brexit and persistent protests in Hong Kong.
Said Ms Ling: “Nodx has already contracted 10.7 per cent year on year for the first seven months of this year and we expect Nodx growth to remain weak around -8.1 per cent to round up the full-year 2019 Nodx growth to -9.7 per cent. If this materialises, it will be the worst full-year Nodx performance since 2009 when Nodx fell 10.5 per cent."
Enterprise Singapore on Tuesday slashed its full-year Nodx forecast to -9 to -8 per cent from -2 to 0 per cent after Singapore's export slump deepened in the second quarter, with Nodx contracting by 14.6 per cent.