SINGAPORE - A low year-ago base and strong performance of the electronics sector pushed up Singapore non-oil domestic exports (Nodx) in June, putting them back on track of recession-defying growth.
Nodx last month jumped 16.1 per cent from June 2019 when it had dropped by 17 per cent, Enterprise Singapore (ESG) said on Friday (July 17).
Last month's export performance beat the consensus forecast for an 8 per cent rise from analysts polled by Bloomberg and a 6.2 per cent increase in a Reuters poll.
On a month-on-month seasonally adjusted basis, Nodx rose 0.5 per cent in June, after the previous month's 4.6 per cent decline. The growth in non-electronic domestic exports outweighed the decline in electronics.
In May, Nodx decreased for the first time in four months, dropping a revised 4.6 per cent year on year - confounding experts who had tipped a 1 per cent increase. It was also a stark reversal from the 9.7 per cent increase in April.
Shipments increased in February and March as well, despite the plunge in global demand for goods because of the coronavirus-induced recession.
Ms Selena Ling, head of treasury research and strategy at OCBC Bank, said that first half Nodx growth is off to a positive start with 6 per cent year-on-year increase, notwithstanding the global Covid-19 pandemic and Singapore's April-May circuit breaker period.
"The June Nodx data suggests that the worst may be over, but do not expect the double-digit Nodx growth momentum to be sustained into the second half," she said.
"The road ahead is yet to be completely smooth sailing, as external risks remain, namely with the second Covid-19 waves of infections seen to be slowing down the pace of re-openings in Hong Kong and some US states for example, and the need for continued generous life-support from major central banks and policymakers to keep business and consumer confidence on a more stable footing," she noted.
Mr Prakash Sakpal, senior economist at ING Bank in Singapore, called June's figures "a substantial upside surprise".
But he cautioned that hopes of an economic rebound should be tamed after the Monetary Authority of Singapore on Thursday warned of a slow and uneven recovery ahead.
Ms Ling said that barring a return to national lockdowns around the globe, which appear less likely, full-year 2020 Nodx growth is likely to be positive, outperforming ESG's forecast of minus 1 to minus 4 per cent year on year.
For June, electronics Nodx expanded by 22.2 per cent in June, following the 12.4 per cent increase in May. The gain was led by integrated circuits, disk media products and telecommunications equipment that were up by 29.1 per cent, 59.8 per cent and 37.8 per cent respectively.
Non-electronic Nodx grew by 14.5 per cent year on year in June, after the 9 per cent decline in the previous month.
Export of non-monetary gold swelled by 238 per cent, specialised machinery rose 45.9 per cent and pharmaceuticals clocked a 30.8 per cent gain. Pharmaceuticals, which are typically volatile, had dropped by 31.2 per cent in May.
ESG said non-monetary gold exports have been helped by the increase in demand for physical gold as a safe-haven asset amid global economic uncertainty and the Covid-19 pandemic.
Exports to the top markets as a whole grew last month, with the largest contributions coming from shipments to Japan (+ 94.7 per cent), led by pharmaceuticals, synthetic rubber and waste, and personal computers.
Exports to South Korea rose 85.6 per cent mainly due to specialised machinery, measuring instruments and integrated circuits.
Nodx to Taiwan increased by 32.6 per cent.
However, exports to Hong Kong, Indonesia and Thailand declined.
Total trade declined over the year in June, with both exports and imports decreasing. On a year-on-year basis, total trade declined by 6.6 per cent, easing from the 25 per cent contraction in May.
