SINGAPORE (July 17): Singapore's non-oil domestic exports (NODX) in June declined more than expected from a year earlier as electronics shipments fell steeply.
This was the fourth straight month the republic has seen its NODX fall.
Exports in June fell 17.3%, the fourth month of year-on-year decline, data from the trade agency Enterprise Singapore showed, slowing down from the 16.3% decline the month before.
This was worse than the 9.9% contraction predicted by 10 economists in a Reuters poll.
On a seasonally adjusted month-on-month basis, exports contracted 7.6% in June after growing a revised 5.8% in May. The poll called for a 3.9% contraction from the month before.
Both electronic and non-electronic NODX declined. On a seasonally-adjusted basis, the level of NODX reached $12.9 billion in June 2019, lower than the previous month’s $14.0 billion.
DBS senior economist Irvin Seah says Wednesday’s set of figures follows a long string of awful data in recent months, and there is no respite at the moment.
Given electronics is the main drag again, Seah says the latest spat between Japan and Korea over the supply of electronics materials has further added salt to wound.
And the brewing trade tensions between the US and Eurozone would be the next risk to watch for.
“Amid the hostile economic conditions, it is unlikely to see light at the end of the tunnel in the near term... Meanwhile, monetary policy has to take accommodative positions to provide some cushion. Policymakers must also be ready to roll out counter-cyclical fiscal measures if required. Pre-emption is key for policies to effectively address the fall,” says Seah.
Agreeing, Oxford Economics says the challenging outlook for Singapore's trade sets the backdrop for the nation's central bank to ease monetary policy at its October meeting and expects Singapore's GDP to grow 0.7% this year.
Meanwhile, UOB is downgrading its NODX growth outlook to –6.0% y-o-y, which would be the lowest annual NODX growth print since 2013 of –7.2% should that come to pass.
Among other stats released, total trade decreased by 7.2% in June from a year ago, following the 2.2% decline in the preceding month. Total imports decreased by 4.8% in June, after the 0.6% decline in the previous month. Total exports decreased by 9.3% in June, following the 3.6% decline in May.
Electronic NODX also declined by 31.9% in June from a year ago, following the 31.6% decrease in the previous month. ICs, PCs and disk media products contracted by 33.0%, 44.6% and 41.7% respectively, contributing the most to the decline in electronic NODX.
On a y-o-y basis, non-electronic NODX decreased by 12.4% in June, following the 11.1% decline in the previous month. Non-monetary gold (-50.2%), petrochemicals (-16.7%) and pharmaceuticals (-11.3%) contributed the most to the decline in non-electronic NODX.
NODX to the majority of the top markets decreased in June 2019, except the US. The largest contributors to the NODX decline were Hong Kong (-38.2%), China (-15.8%) and the EU 28 (-22.1%).
NODX to China decreased by 15.8% in June 2019, following the 23.3% contraction in May 2019, mainly due to non-monetary gold (-55.3%), ICs (-39.7%) and primary chemicals (-50.5%).
