Non-oil exports a 4.9% rise in February after 3 months of decline: Singapore

SINGAPORE – Singapore’s non-oil domestic exports (Nodx) rose 4.9 per cent last month after three straight months of decline, on the back of growth in non-electronic shipments.

This defied economists’ expectations of a 1.6 per cent drop, as polled by Bloomberg, marking an uptick from its weak start in 2019. In January, exports fell 10.1 per cent compared to the same period last year.

While economists said the latest figures by Enterprise Singapore show encouraging signs and a potential stabilisation of orders, it remains to be seen if this growth can be sustained.

They added that there is a need to account for seasonal effects of Chinese New Year in February as well.

UOB economist Barnabas Gan noted that taking an average of January and February’s figures shows a 2.6 per cent contraction in the first two months of 2019, down from 3.5 per cent growth in the same period of 2018.

He added that electronic exports in particular have been negative for almost a whole year.

“That basically reinforces the view that at least in Asia, the fading tech boom, as well as slowdown in trade activities, are still negatively impacting Singapore’s external environment,” he said.

The latest figures showed electronic exports remained weak in February, though they eased from a 15.9 per cent drop in January to clock an 8 per cent decline instead. Shipments of disk media products, personal computers, as well as diodes and transistors contributed the most to its fall.

In fact, Nodx growth came on the back of non-electronic Nodx, which increased by 9.4 per cent in February after a 7.9 per cent drop the month before.

This was mainly due to shipments of non-monetary gold (+258 per cent), pharmaceuticals (+12 per cent) and food preparations (+18.5 per cent).

Although Singapore’s non-electronic exports generally outweigh that of electronics, providing some support overall, Mr Gan added that electronics tend to be less volatile than export clusters like pharmaceuticals. This means that current growth may not be sustainable.

Maybank Kim Eng economist Chua Hak Bin flagged the “cloudy” outlook for tech exports as well, with South Korea – a major electronics exporter – seeing its steepest Nodx decline in three years. China’s exports fell more than 20 per cent as well.

“A bottoming out of the global electronics demand will hinge critically on a trade deal done sooner rather than later,” said Dr Chua, referring to a resolution of trade tensions between the US and China.

He added, however, that there is evidence of a diversion of investments and some trade orders to Asean countries, with contractions in exports here less severe than in North-east Asia. This, he said, “may help to cushion the extent of the slowdown in the region”.

Non-oil exports to most of Singapore’s top markets increased in February as well except to Japan, South Korea, Europe and Indonesia, said Enterprise Singapore on Monday (March 18).

This increase, added the agency, was mainly due to China, Hong Kong and the United States.

Non-oil re-exports rose by 7.2 per cent last month, extending its 12.1 per cent growth in January, with increases in both electronics and non-electronics shipments.

Total trade grew over the year as well, increasing 3.3 per cent in February, after 4.2 per cent growth in the preceding month. This was supported by import and export growth.

On a seasonally-adjusted basis, the level of total trade reached $87.2 billion in February 2019, higher than the previous month’s $85.0 billion.


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