SINGAPORE: Exports in Singapore fell a disappointing 2.3 per cent last month, after a surprise rebound in May which saw exports surging by 11.6 per cent.
Non-oil domestic exports (NODX) were hit by a decline in both electronic and non-electronic exports, according to latest figures released by International Enterprise (IE) Singapore on Monday (Jul 18).
Exports to half of Singapore’s top 10 markets fell, with Indonesia, China and the European Union leading the decline. Exports to China – Singapore’s largest export market – remained weak, contracting 9.9 per cent after a 10.1 per cent decline in May and a 7.4 per cent fall in April.
Overall, exports of electronic products fell 1.7 per cent in June, following the 6 per cent contraction in the previous month. The decrease was largely due to PCs (-29.0 per cent), disk drives (-26.9 per cent) and parts of PCs (-8.5 per cent).
Non-electronic exports shrank 2.5 per cent, in contrast to the 19 per cent expansion in May. The decrease was led by petrochemicals (-15.6 per cent), primary chemicals (-30.5 per cent) and electrical machinery (-33.0 per cent).
Non-oil re-exports (NORX) rose 0.6 per cent, in contrast to the 3.2 per cent decline in the previous month, mainly due to an increase in non-electronic re-exports which outweighed the fall in electronic re-exports.
Electronic re-exports contracted by 0.7 per cent, after declining 7.9 per cent in May. In contrast, re-exports of non-electronic products rose 2 per cent, following a 1.9 per cent increase in the previous month.
According to DBS’ senior economist Irvin Seah, while the sharp month-on-month pullback for NODX is in line with expectations, he said the extent of the downswing was “more severe” than anticipated. “This is a yet again another reminder that prospects on the external front are not that bright after all,” said Mr Seah. “And this is despite the better-than-expected advance GDP estimates in the second quarter.”
Mr Seah also said the surge in May was largely due to a spike in some unusual export products, which is unlikely to be sustainable. “These anomalies expectedly dissipated in June, which makes for the ‘fall back to reality’ in the NODX figures,” he added. “With China’s deceleration being a structural one, the lacklustre NODX performance could last for a while.”
Elsewhere, UOB economist Francis Tan noted that there seem to be some positive developments in the trade sector for the second half of this year.
“First, global trading activities seem to be picking up some pace. The Baltic Dry Index, an indicator of global trade volume, had gained nearly 160 per cent since February 2016 to date. This may bode well for global trading volume in the months ahead. Second, the past three consecutive months of on-year expansion in Singapore’s manufacturing activities may bode well for exports in the coming months, as it had reversed the contractionary trend over the past 18 months before that.”
