Non-oil exports growth eases to 5% in August

Stacked containers at a port in Zhangjiagang, China. Singapore's exports to China - its biggest single market - fell 17.8 per cent year on year last month.
Stacked containers at a port in Zhangjiagang, China. Singapore's exports to China - its biggest single market - fell 17.8 per cent year on year last month.PHOTO: AGENCE FRANCE-PRESSE

Data shows 1.5% dip in electronic shipments but 33.4% jump in export of pharmaceuticals

After a jump in July, Singapore's export growth slowed last month, with continuing signs of weakness in electronic shipments.

Non-oil domestic exports (Nodx) rose 5 per cent from a year ago, higher than a Bloomberg consensus forecast of 3.9 per cent growth, according to Enterprise Singapore data released yesterday.

This increase, which continues to be supported by pharmaceuticals, comes on the heels of an 11 per cent surge in July.

Electronic exports dipped 1.5 per cent last month, performing better than the 5.8 per cent decrease in July. 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.

Strong showing in non-electronic shipments last month due to pharmaceuticals offset this slip.

Non-electronic Nodx grew by 7.8 per cent last month, less than half the 18.6 per cent rise in July, 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 if these were overtaken by new developments elsewhere, growth could soften again.

Overall, domestic exports to Singapore's top 10 markets grew, on the back of higher 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 last month, with weak electronics shipments.

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.

This comes on expectations of US President Donald Trump introducing further tariffs on US$200 billion (S$275 billion) worth of Chinese imports in the coming days, with IG market strategist Pan Jingyi saying it will likely 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.

  • 1.5%

    Electronic exports dipped last month, performing better than the 5.8 per cent decrease in July.

    7.8%

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

He added that weakness in such 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, 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.

A version of this article appeared in the print edition of The Straits Times on September 18, 2018, with the headline 'Non-oil exports growth eases to 5% in August'. Print Edition | Subscribe