Singapore exports flat in August after July plunge

SINGAPORE — Exports of locally made goods were flat in August compared with the same month a year ago, said trade agency International Enterprise (IE) Singapore on Friday (Sept 16), clawing back after the steep 10.6 per cent contraction in July, although analysts warned that global pressures remain and could threaten the nascent recovery.

On a month-on-month, seasonally adjusted basis, non-oil domestic exports (Nodx) fell 1.9 per cent in August, the same pace as in July, said IE Singapore. The Nodx showing was better than the median forecasts of a 4.1 per cent year-on-year slump and 2.9 per cent month-on-month decline in a Reuters poll of analysts.

“In the midst of a weak external environment, less-negative news can be considered positive. The flat Nodx growth year-on-year for August 2016, in contrast with a double-digit decline in July 2016, can be considered an improvement. However, sustainability is an issue as the month-on-month data is still declining,” said Dr Tan Khay Boon, senior lecturer at SIM Global Education.

Shipments of non-electronic products increased by 2.7 per cent year-on-year last month, turning around from the 9.5 per cent contraction in the previous month. The expansion was led by the exports of non-electric engines and motors, specialised machinery and structural parts made of iron, steel and aluminium. Meanwhile, shipments of electronic products contracted by 6 per cent, slowing from the 12.9 per cent fall in July. The decline was largely due to a fall in the exports of personal computers, disk drives and integrated circuits. 

By geography, shipments to six of the top 10 export markets rose in August, with Taiwan, Hong Kong and the United States accounting for the largest gains, followed by South Korea, Thailand and Malaysia. Exports to the European Union, China, Japan and Indonesia fell.

“Looking ahead, Nodx performance is likely to stabilise but remain choppy in the months ahead. The modest pick-up in the US economy, mitigated by sluggish growth in the Eurozone and Japan, and continued deceleration in China, point to a greater reliance on regional trade momentum driven by domestic demand at this juncture. We tip 2016 Nodx growth to be minus 4 per cent year-on-year, with the year-to-date currently running at minus 4.1 per cent year-on-year,” said Ms Selena Ling, head of treasury research & strategy at OCBC Bank.

IE Singapore last month revised its export forecast to a narrower decline of between 3 and 4 per cent this year, compared with the previous forecast of a 3 to 5 per cent drop.