Singapore non-oil exports extend slide with 10% drop in April, more than expected

Cranes and containers at Pasir Panjang Terminal on Aug 16, 2018.

SINGAPORE - Singapore's non-oil domestic exports (Nodx) fell 10 per cent year on year in April, continuing a downtrend that saw shipments slump 11.8 per cent in March.

Enterprise Singapore noted the high base from a year ago as it released the export data on Friday (May 17).

The March figure was the biggest year-on-year monthly fall in Nodx since the 12 per cent fall in October 2016, and came on the back of the biggest year-on-year drop in electronics exports since 2013.

April's showing was worse than the 4.6 per cent drop expected by analysts polled by Bloomberg, with both electronic and non-electronic exports shrinking.

The electronics exports sector extended a year of contraction, with a 16.3 per cent fall, following March's 26.7 per cent plunge.

Integrated circuits (-21.2 per cent), disk media products (-31.3 per cent) and parts of integrated circuits (-51.7 per cent) contributed the most to the electronics slump.

Non-electronic exports declined 7.9 per cent, after a 7.1 per cent drop seen in March. This was mainly due to a 46.6 per cent plunge in pharmaceuticals shipments, a volatile export segment which shrank 36.5 per cent in April.

ING Asia economist Prakash Sakpal called the latest figures "yet another disappointing export result".

"Singapore is among the front-line Asian economies to face the brunt of the recent escalation of trade tensions between the US and China," he said, explaining that the impact of a deteriorating external environment has been seen in steeper manufacturing contraction driving a gross domestic product (GDP) slowdown in the first quarter of this year.

He added that the data foreshadows a continued slowdown in manufacturing and GDP growth. As a result of weak activity, he expects the Singapore central bank to ease monetary policy.

Dr Chua Hak Bin, senior economist at Maybank Kim Eng, agrees that manufacturing will likely remain weak in the second quarter.

"Escalating US-China trade tensions are dashing hopes for a trade recovery in the second half of the year," he said, pointing in particular to the global electronics sector, where he expects US export controls against Chinese tech company Huawei to disrupt the tech supply chain.

Singapore's non-oil exports to the majority of the top markets shrank in April, except for Hong Kong and the United States, said Enterprise Singapore on Friday.

Exports to the EU fell the most, by 25.4 per cent, following March's 15.1 per cent contraction. Another market that saw a large plunge was Japan (-31.1 per cent), while Malaysia saw a drop of 13.6 per cent and shipments to China, Singapore's biggest export market, shrank 5.8 per cent.

Exports to the US, the third-biggest destination, grew 2.2 per cent year on year in April, after rising 22 per cent in March.

On a month-on-month seasonally adjusted basis, Nodx declined by 0.6 per cent in April, following the previous month's 14.3 per cent contraction.

Non-oil re-exports grew 7.7 per cent in April, continuing the upward trend from March's 5.8 per cent increase, due to growth in both electronic and non-electronic re-exports.

Total trade increased over the year by 3.2 per cent in April, with exports declining by 0.5 per cent while imports grew 7.5 per cent. On a seasonally adjusted basis, total trade reached $85 billion in April, higher than March's $84.2 billion.

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