Singapore exports report surprise rise

Singapore’s exports have risen again. Source: Flickr

Singapore’s exports posted an unanticipated reversal last month, with non-oil domestic exports (NODX) up 2.1 per cent, according to the city-state’s trade agency International Enterprise (IE) Singapore figures.

Economists were expecting NODX to fall 1 per cent year-on-year after they plunged 10.1 per cent in January, a third straight month of contraction.

Exports of electronic products increased by 0.7 per cent last month, compared to a 0.6 per cent decline in January. The increase was predominantly due to disk-media exports (20.9 per cent), telecommunications equipment (23.5 per cent) and PCs (9.9 per cent).

Non-electronic exports rose 2.7 per cent, in contrast to the 14.1-per-cent fall in January. The rise was pushed by pharmaceuticals (40 per cent), non-monetary gold (94 per cent) and jewellery (55.6 per cent).

Exports to six of Singapore’s top 10 customers fell with growth being spurred on by the EU, Hong Kong and Japan, IE Singapore announced.

Non-oil re-exports (NORX) also increased in February, rising 2.4 per cent compared to the 12.1 per cent decline in January, the agency said.

Electronic re-exports contracted by 2 per cent, following a 15-per-cent decline in January. The decline was due to ICs (-2.8 per cent), telecommunications equipment (-13.1 per cent) and parts of PCs (-13.9 per cent).

Non-electronic re-exports increased by 7.6 per cent, compared to the 8.5 per cent fall in January. The expansion was due to pharmaceuticals (+43.5 per cent), alcoholic drinks (+48.6 per cent) and personal beauty exports (+30.7 per cent), IE Singapore said.

Pharmaceuticals, a volatile sector, rose by 6.9 per cent in January.

Shipments to the US rose up 4.2 per cent, in contrast to the 5.1-per-cent decline in January.

“A structurally lower global GDP growth trend also exerts further downward pressure on an economy that has typically been a high-beta global proxy…The delay in export recovery suggests cyclical headwinds and that the economy is likely to decelerate further,” Morgan Stanley said in its Asean outlook report, in reference to the city-state’s export-oriented economy.

Vishnu Varathan, a senior economist at Mizuho Bank, said: “If you take January and February together, the bigger picture is that exports are still pretty much in contraction, about 4 to 5 per cent year-on-year, so that still does not detract from the broader picture where exports and manufacturing remain very much in contractionary region.

“One of the big boosts for the export numbers came from pharmaceuticals. This corresponded on a geographical basis with further pick-up in exports to Europe, whereas the exports to the US remained pretty much in contraction, and the contraction in exports to China eased off a bit but still fell.

“So we’re looking at a picture where it’s very fragmented and the strength is far from broad-based. Whether or not it’s sustainable, the jury is out for now. Downside risks remain and in the near term, a sustainable pick-up doesn’t seem to be in the horizon yet, given that on an aggregate demand basis, things are still not picking up yet.”

Another observer said the global economy would continue to be erratic.

Jeff Ng, Southeast Asia economist at Standard Chartered Bank, said: “Growth in the US and Europe may start to slow compared to last year as well. So that does imply NODX will require more support from Asian demand for overall NODX to see some improvement.

“For China’s case, given that the economy is continuing to experience some slowdown in the near term, we do expect headwinds for NODX to China to continue. So while we expect some stabilisation, we don’t expect any significant upside, but perhaps less of downside going forward.”