Quick take: Analysts remain cautious over Singapore's export outlook

Early Thursday, IE Singapore said the city-state's non-oil domestic exports (NODX) rose by 4.7 per cent from a year ago to S$14.2 billion in June 2015 due to an expansion in both electronic and non-electronic exports. This is in contrast to May, when NODX fell 0.3 per cent on a year-on-year basis to about S$13.2 billion.

Here are some comments from Ho Woei Chen, an economist at UOB Global Economic and Markets Research:

"While the headline NODX posted a better-than-expected year-on-year growth in June, we are still cautious about the export outlook and therefore maintain our 2015 NODX forecast of a 1 per cent contraction."

"Weak economic environment and lower confidence levels amongst Singapore's top trading partners will weigh on the prospects of exports over the next few months."

"Furthermore, export of petrochemicals is expected to remain under pressure given current oil price weakness (on a year-on-year basis)."

Irvin Seah, DBS senior economist, said:

"Non-oil domestic export (NODX) figures for June were mixed. Headline NODX for the month rose by 4.7 per cent year-on-year. Despite the encouraging year-on-year figure, the sequential decline of 2.4 per cent month-on-month (seasonally adjusted basis) is a concern. Note this follows a 3.3 per cent slide in the previous month. That is, the low base has helped in lifting the year-on-year figure but in effect, export sales are still slipping.''

"Beyond the rising external headwinds and global uncertainties, Singapore manufacturers are also struggling with the triple whammy of higher business costs, labour crunch and a strong currency. While manufacturers are finding it difficult to take on new orders given supply side constraints, they are also losing their price competitiveness to regional players."

"For example, electronics exports in Singapore have been stuck in the doldrums for the past three years. This has allowed emerging electronics manufacturers such as Vietnam to catch up. In fact, Vietnam will overtake Singapore to become the fifth largest electronics exporter in Asia within the next two years.''