Economists see slower export growth this year as March shipments shrink 2.7%

Non-oil domestic exports (NODX) fell 2.7 per cent last month, partly due to a high base from a year ago.
Non-oil domestic exports (NODX) fell 2.7 per cent last month, partly due to a high base from a year ago.PHOTO: ST FILE

SINGAPORE - Singapore's exports continued to contract for a second month in March, but the pace of decline eased compared to February.

Non-oil domestic exports (NODX) fell 2.7 per cent last month, partly due to a high base from a year ago, according to data from Enterprise Singapore released on Tuesday (April 17).

The figure came in lower than the already muted economists' expectations of a 1.2 per cent rise.

It was better than February's revised contraction of 6 per cent - its first decline after four months of growth. But February had fewer business days with the Chinese New Year holidays in the middle of the month. Last year, the holidays were in January.

On a month-on-month seasonally adjusted basis, NODX decreased by 1.8 per cent in March, narrowing from the previous month's 2.7 per cent decline.

Both electronic and non-electronic NODX continued to decline, albeit at a slower rate.

Electronic NODX fell by 7.1 per cent in March 2018, easing from the 12.7 per cent decrease in the previous month but recording a fourth straight month of decline. 

Non-electronic NODX decreased by 1.3 per cent in March 2018 from the high base a year ago, after the 3.3 per cent decline in the previous month.

Shipments to the majority of the top markets increased in March 2018, with the exception of China, Hong Kong, Thailand and Malaysia. Growth was led by the US, Japan and the European Union.

Non-oil re-exports - often seen as a proxy for wholesale trade - declined slightly by 0.2 per cent in March, following the 0.1 per cent growth in February as electronic re-exports decreased while non-electronics grew.

Shipments to the majority of the top markets increased in March 2018, with the exception of China, Hong Kong, Thailand and Malaysia. Growth was led by the US, Japan and the European Union.

Non-oil re-exports – often seen as a proxy for wholesale trade – declined slightly by 0.2 per cent in March, following the 0.1 per cent growth in February as electronic re-exports decreased while non-electronics grew.

Economists said that the drop was not a complete surprise, as electronics shipments have been projected to moderate and high base effects kicked in.

Mr Bernard Aw, economist at IHS Markit, said this corresponds with reports on waning global growth in electronics sales.

He added: “The rising threat of a global trade war is increasing uncertainty about worldwide trade conditions, which is also bad news for Singapore’s trade-dependent economy.” 

But even so, economists expect shipments to pick up for the rest of 2018, albeit at a more muted pace compared to last year.

UOB economist Francis Tan said: “The very strong on-year growth rates in exports for most of the past year may not be sustained as we move towards the second half of 2018.”

Maybank economists Chua Hak Bin and Lee Ju Ye concurred that manufacturing and exports growth will “like remain positive, but ease to the low single-digit by year-end”.