Growth in Singapore non-oil exports slows to 5% in August; trade risks cloud outlook

Non-oil domestic exports (Nodx) went up by 5 per cent from a year ago ago, ahead of an analysts' consensus forecast of 3.9 per cent. PHOTO: ST FILE

SINGAPORE - After a jump in July, Singapore's export growth slowed last month, with continued though smaller weakness in electronic shipments and with support still mainly coming from pharmaceuticals.

Non-oil domestic exports (Nodx) rose 5 per cent from a year ago, ahead of a Bloomberg analysts' consensus forecast of 3.9 per cent growth, according to Enterprise Singapore data released on Monday (Sept 17).

This comes on the heels of an 11 per cent surge in July, driven by pharmaceuticals.

Electronic exports dipped 1.5 per cent in August, performing better than the 5.8 per cent decrease in the previous month. This was mainly due to falls in exports of diodes and transistors, parts of personal computers and integrated circuits.

However, the electronics Nodx has been shrinking year-on-year since last December, with analysts expressing concern over spillover from the trade spat between the United States and China.

A strong showing in non-electronic shipments, due to pharmaceuticals again, offset this slip.

Non-electronic Nodx grew by 7.8 per cent in August, less than half the 18.6 per cent rise the month before, with pharmaceuticals expanding 33.4 per cent.

Also supporting its growth was an increase in food preparations and measuring instruments shipments.

ING chief economist and head of research for Asia-Pacific Robert Carnell expressed concern over this "rather narrow set of components that seems to be doing very well", adding that, should it be taken over by new developments elsewhere, growth could soften again.

Overall, domestic exports to Singapore's top 10 markets grew, on the back of exports to the United States, Europe and Indonesia.

But shipments to China - Singapore's biggest single market - fell 17.8 per cent year on year, with weak electronics shipments, worse than the 3.9 per cent drop in July.

Experts are not too optimistic about the outlook for exports, with Nomura research analysts Euben Paracuelles and Brian Tan expecting electronics exports to remain weak. They noted there are signs of a slowdown in global semiconductor shipments and electronics demand.

Maybank Kim Eng analysts Chua Hak Bin and Lee Ju Ye added that trade numbers will continue to be "distorted" in the third quarter of the year, as companies stock up in anticipation of higher US and China tariffs.

Media reports over the weekend said US President Donald Trump will introduce further tariffs on US$200 billion (S$270 billion) of Chinese imports in the coming days, with IG market strategist Pan Jingyi saying such action will affect the outlook for trade-dependent Singapore.

ING's Mr Carnell said trade tensions may not be the main reason for the weak showing in electronics, noting that the trend could also be due to China's attempts to be less reliant on imports in high-tech areas such as electronics. He added that weakness in exports to China has been ongoing for a while, appearing more long-lasting than the impact of tariffs.

Export data also showed that non-oil re-exports (Norx), an indicator of wholesale trade performance, increased 14.1 per cent last month - with growth in both electronics and non-electronics - after expanding 8.4 per cent in July.

Total trade grew by 13.3 per cent, following 17.4 per cent growth in the preceding month, as both imports and exports rose.

Last month, Government planners raised the full year growth forecast for Nodx to between 2.5 per cent and 3.5 per cent, up from 1 per cent to 3 per cent previously.

Correction note: This article has been edited for clarity.

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