Singapore exports surprise with a 1.1 per cent contraction in September

SINGAPORE — Against expectations, Singapore’s non-oil domestic exports (NODX) contracted in September, due to falling electronics trade and moderate growth in non-electronics shipments.

NODX shrank 1.1 per cent on-year, a reverse from the 16.7 per cent growth in August, International Enterprise (IE) Singapore said on Tuesday (Oct 17). 

Economists in a Reuters poll had expected growth of 12.7 per cent, buoyed by strength in electronics shipments.

Ms Selena Ling, head of treasury research and strategy at OCBC Bank, said: “This marks the first year-on-year contraction since April, and is the lowest since September last year.

“While we had expected some NODX retraction in the fourth quarter due to the higher base a year ago, the drop in NODX momentum came slightly earlier than expected.”

It remains to be seen if September’s numbers were a blip, or the start of a more sustained slowdown induced by the tech cycle boom reaching its tipping point.

Ms Ling noted that NODX figures for October last year was not seen as “challenging”, given that it had shrunk 12 per cent year-on-year.

She added that NODX growth for the first nine months of this year averaged 8.3 per cent, which was above IE Singapore’s full-year growth forecast of 5 to 6 per cent.

UOB economist Francis Tan said that the contraction could be a sign of things to come.

“Athough we remain positive in our outlook on the overall NODX expansion for 2017, we had doubts in the past few months about whether the strong double-digit semiconductor NODX growth since November 2016 can be sustained going towards the end of 2017, and on to 2018. This is especially since the current electronics cycle may be coming to an end, with the roll-out of the next wave of smartphones,” Mr Tan said.

Shipment of electronics declined 7.9 per cent in September, compared to the 20.8 per cent growth in August. Personal computers, integrated circuits, and diodes and transistors contributed the most to the decline.

Non-electronic NODX went up 1.9 per cent last month, following a 15 per cent growth in the previous month, helped by non-monetary gold, petrochemicals and specialised machinery.

NODX to seven out of the top 10 markets expanded in September, with the exception of Hong Kong, the European Union and Thailand. The largest contributors to the NODX increase were Malaysia, China and Japan.