Singapore's non-oil exports slide less than expected

The PSA Brani container terminal pictured on March 18, 2016.
The PSA Brani container terminal pictured on March 18, 2016. ST PHOTO: MARK CHEONG

7.9% contraction less than forecast, but economists not upbeat as exporters still face weak global demand

Singapore's exports contracted less than expected last month, but economists found cold comfort in the numbers as the outlook for the broader economy remains lacklustre.

Non-oil domestic exports (Nodx) shrank 7.9 per cent last month from a year ago, slightly better than the 8.4 per cent slide forecast by economists, and below March's 15.7 per cent plunge.

However, economists are not optimistic about a potential turnaround as exporters are still struggling with weak global demand.

Last month's better-than-expected performance was due in part to a 17.9 per cent rise in pharmaceutical shipments, which tend to be volatile.

There were, however, broad declines across most other segments.

Electronics Nodx contracted 7.4 per cent last month, following a 9.1 per cent decrease in March. Meanwhile, non-electronics Nodx declined 8.1 per cent, after an 18 per cent fall in the previous month.

Shipments to almost all of Singapore's top 10 export markets fell last month, with the exception of the European Union and Hong Kong. Non-oil domestic exports to Taiwan, South Korea and Indonesia saw the largest declines.

ANZ economists Ng Weiwen and Glenn Maguire said the numbers point to "persistent cyclical and structural pressures on Asian trade, mirroring trends in export data elsewhere in the region".

This has been due in part to China's slowing growth, which will continue to pose significant headwinds for Singapore, they added.

The lacklustre global environment has been a particular bane of manufacturers here, as two-thirds of manufactured goods are exported.

DBS economist Irvin Seah said weak demand for exports is likely to translate into tepid second-quarter economic growth figures.

"We're not out of the woods yet as far as export performance is concerned... All is not well on the external front," he added.

At CEI Contract Manufacturing, however, sales are still holding up despite the slowdown.

The company makes industrial and laboratory equipment, mainly for the medical technology and life science sectors.

Managing director Tan Ka Huat said the company had a "reasonably good" first quarter.

He added: "Sentiment among my customers remains relatively good. We had a stable first half compared with last year, though the outlook for the second half is still a bit hazy."

A version of this article appeared in the print edition of The Straits Times on May 18, 2016, with the headline 'S'pore's non-oil exports slide less than expected'. Print Edition | Subscribe