Singapore exports up 8.3%, but come in below expectations

Non-electronic exports grew by 11.9 per cent in September, up from a 7.8 per cent increase the month before, with pharmaceuticals, non-monetary gold and food preparations contributing the most to this.
Non-electronic exports grew by 11.9 per cent in September, up from a 7.8 per cent increase the month before, with pharmaceuticals, non-monetary gold and food preparations contributing the most to this.PHOTO: ST FILE

Singapore's export growth clocked a strong showing last month, led by non-electronic shipments and supported by the volatile pharmaceuticals sector again.

The Republic's non-oil domestic exports (Nodx) rose 8.3 per cent from a year ago in September, up from 5 per cent in August, with expansion in non-electronic exports outweighing a dip in electronics.

This figure, however, remained below analysts' expectations of 11.1 per cent growth reflected in a Bloomberg forecast poll.

Last month's growth may also have been impacted by some re-routing of trade routes between the United States and China for goods produced there, OCBC Bank's head of treasury research and strategy Selena Ling told The Straits Times.

"If you look at China's trade surplus data for September, it is also very obvious that there is still a lot of frontloading that is ongoing, ahead of further tariffs that are to come," she said.

Non-electronic exports grew by 11.9 per cent last month, up from a 7.8 per cent rise the month before - with pharmaceuticals, non-monetary gold and food preparations contributing the most to this.

Electronic Nodx declined 0.9 per cent year-on-year as well, following a 1.5 per cent dip in August.

Contributing the most to this slip were shipments of personal computers, diodes and transistors, as well as parts of integrated circuits.

Year-on-year growth in this sector has also been in negative territory since last December, with analysts expressing concern over the fallout from heightening trade tensions.

 

"I think the days of double-digit declines, hopefully, seem to be over," said Ms Ling. "But I don't think we will see a sharp pick-up yet, not with the general growth environment softening and the uncertainty around when the US-China trade war will be resolved."

On a seasonally adjusted month-on-month basis, Nodx declined 4.3 per cent last month, after a 0.4 per cent growth in August - due to a drop in both electronic and non-electronic exports.

While Nodx to the top 10 markets rose overall last month, with exports to the US, Europe and Thailand in the lead, shipments to other areas such as China, South Korea, Malaysia, Japan and Hong Kong fell.

UOB senior economist Alvin Liew noted the "shifting importance of export destinations".

In particular, exports to China dropped 17.8 per cent from the year before, with declines in both electronics and non-electronics. However, shipments to the US jumped 41.5 per cent overall compared with a year ago.

"It is notable that exports to China again contracted for the fifth consecutive month and suffered significant declines, while Nodx to South Korea also endured another bad month," said Mr Liew, who added that export declines to North Asia could be related with the global tech cycle slowdown.

Stronger exports to the US reflect the robust outlook there.

"If this trend persists, then developed economies, led by the US, may again overtake China as far as Singapore's export destination is concerned," he said, adding that trade tensions will cloud the outlook for trade-dependent Singapore.

Total trade increased by 13.5 per cent last month, up from 13.3 per cent in August, and non-oil re-exports rose by 13.3 per cent last month.

A version of this article appeared in the print edition of The Straits Times on October 18, 2018, with the headline 'S'pore exports up 8.3%, but come in below expectations'. Print Edition | Subscribe