SINGAPORE - Singapore’s non-oil domestic exports (Nodx) slumped 11.7 per cent in March, after a short-lived rise of 4.8 per cent in February, on the back of the biggest year-on-year drop for electronics exports since 2013.
Enterprise Singapore noted the "high base" effect from a year ago as it released the export data on Wednesday (April 17).
Still, the March figure was way worse than the 2.2 per cent drop expected by analysts polled by Bloomberg. It is also the biggest year-on-year monthly fall in Nodx since the 12 per cent fall in October 2016.
Before February, exports had slid year on year for three straight months: 10.1 per cent in January, 8.5 per cent in December and 2.8 per cent in November.
March’s dismal showing was led by the 26.7 per cent year-on-year plunge in electronic exports, following the 8.2 per cent drop in the previous month, which means that this sector has contracted for about a year.
Integrated circuits (-22.2 per cent), personal computers (-46.3 per cent) and disk media products (-40.3 per cent) contributed the most to the electronics slump.
However, experts suggest this could be indicative of the regional electronics market.
Maybank economist Lee Ju Ye told The Straits Times: “We are seeing more signs of fading for the electronics sector, not just in Singapore but also in electronics powerhouses like South Korea and Taiwan.”
She added that the electronics downcycle may be nearing its bottom and that weak recovery in the industry may be seen in the second half when the US-China trade deal is finalised in May.
“There are tentative positive signals, with PMIs (Purchasing Managers’ Index) for most of Asia showing an improvement in March,” she said.
Non-electronic exports declined 7 per cent year on year, reversing from the 9.4 per cent increase seen in February. This was mainly due to shipments of pharmaceuticals (-36.5 per cent), specialised machinery (-24.4 per cent) and petrochemicals (-15.1 per cent).
However, DBS senior economist Irvin Seah said: “The drag from pharmaceuticals can be discounted given its volatile nature and weak linkages with the rest of the economy.”
He added that the 11.7 per cent plunge can be attributed to the “lingering effect of the trade war” as well as a high base and ongoing slowndown in China.
“A turnaround in the sequential month-on-month figure as well as electronics demand will be crucial for an improvement in the overall manufacturing sector performance,” he said.
He also sounded a more optimistic note looking ahead.
“While there could be more downside risk ahead, the ongoing trade negotiation between the US and China is seeing light at the end of the tunnel,” he said, pointing to labour market conditions in the US remaining firm.
“Stimulus measures from China could also start to spill over to Singapore’s export performance in the coming months,” he added.
Nonetheless, some other experts warned of slower growth ahead.
Nomura research analysts Euben Paracuelles and Charnon Boonnuch noted that the fall in Nodx growth was reflected in “lower-than-expected” estimated GDP (gross domestic product) growth of 1.3 per cent year on year in the first quarter of this year, based on the Government’s advance estimate.
“Overall, we remain cautious on the growth outlook,” they said in a statement, forecasting GDP growth this year to be at 2.5 per cent, slowing from last year’s 3.2 per cent. “We expect a deepening in the global tech downturn, which would leave the manufacturing sector vulnerable over the next few months.”
Singapore’s non-oil exports to the majority of the top markets shrank in March, except for the United States (+23.1 per cent), said Enterprise Singapore on Wednesday.
Exports to Japan declined the most, at 36.6 per cent, following February’s 42.6 per cent contraction. The other markets that saw large drops were Taiwan (-27.4 per cent) and Hong Kong (-22.4 per cent), while shipments to China shrank 8.7 per cent.
Non-oil re-exports grew 5.9 per cent in March, following February's 7.2 per cent increase, due to growth in non-electronic re-exports which outweighed the decline in electronics.
Total trade decreased over the year by 0.9 per cent in March, with exports declining by 3 per cent while imports grew 1.5 per cent. On a seasonally adjusted basis, total trade reached $84.2 billion in March, lower than February's $87.1 billion.