China’s downturn will continue to impact Asean. Source: Wikipedia
Non-oil domestic exports (NODX) from Singapore fell further last month, hurt by a sudden decline in non-electronic goods, International Enterprise (IE) Singapore announced on Monday.
Year-on-year, NODX fell 7.2 per cent in December, after registering a 3.4 per cent decrease in November, according to the agency, which drives the city-state’s international trade.
On a month-on-month seasonally adjusted (SA) basis, NODX declined by 3.1 per cent last month, after November’s 3.8 per cent decrease, due to the contraction in non-electronic exports which outweighed the flat growth in electronic shipments.
“Electronics, pharmaceuticals, petrochemicals were lower. You would expect a bit of volatility from the pharmaceutical and petrochemicals,” explained head of foreign-exchange research at Maybank, Saktiandi Supaat.
“On the country contribution side in terms of our export markets, China led the decline followed by other periphery countries that contributed to the Chinese economy.”
Exports of electronic products fell 0.3 per cent in December, in contrast to the 0.6 per cent growth in November. The contraction was largely because of integrated circuits (ICs) with -11.3 per cent, computer parts (-13 per cent) and disk drives (-22 per cent), IE Singapore announced.
Non-electronic exports slumped by 10.3 per cent, following the 5.1 per cent decline in November. Petrochemicals fell the most (-17.5 per cent), primary chemicals (-41.8 per cent) and civil-engineering equipment parts (-43.5 per cent).
Exports to all of the top 10 markets, except the US, Japan and Hong Kong, fell last month. China, South Korea and Taiwan were mainly behind the slump.
But December exports to the USA rose 12.8 per cent, 14.7 per cent for Japan and 6.3 per cent for Hong Kong.
Electronic re-exports decreased by 3.5 per cent in December, compared to the 1-per-cent growth in November. The contraction was due to ICs (-14.4 per cent), parts of ICs (-26.9 per cent) and capacitors (-20.9 per cent).
Non-electronic re-exports grew by 5.8 per cent, after the 2.3 per cent increase in the previous month. The rise was due to aircraft parts (71.8 per cent), nickel (124.4 per cent) and non-electric engines and motors (12.9 per cent), IE Singapore reported.
Non-oil re-exports (NORX) expanded by 0.8 per cent, following the 1.6 per cent growth in the previous month, due to an increase in non-electronic re-exports which outweighed the decline in electronic re-exports.
Economists predict an unsteady future for Singapore’s exports with the Chinese slowdown expected to continue to dampen growth.
Head of treasury research and strategy at the OCBC Bank, Selena Ling, said: “Since oil prices are quite stuck below US$30 per barrel, it does look like the offshore marine sector will continue to have a hard time.
“Manufacturing in general – we’re looking at flattish trajectory for 2016 as well. This comes on the back of 2015 where the manufacturing growth was quite poor on record. We do think continued slowdown in China will continue to be a drag on the region including Singapore,” she said.
She said electronics exports were starting to stabilise. “So hopefully, this is reflective of improving demand in the more developed economies like the US and also Europe,” added Ling.
As with November’s unexpected 3.4 per cent decline in NODX, much of the blame lay on the contraction in Chinese imports, which was Singapore’s largest market in 2014.
Economists polled by Reuters were expecting December NODX to fall 5.1 per cent from a year earlier.
