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Quick takes: NODX falls 'back to reality' in June

Monday, July 18, 2016 - 10:32
32524818 - 26_08_2014 - pixgeneric.jpg
Containers at Tanjong Pagar Terminal of PSA International seen in 2014.

SINGAPORE'S non-oil domestic exports (NODX) fell "back to reality" in June by declining 2.3 per cent year on year, after leaping 11.6 per cent in May.

The surge in May - which was due to a spike in some unusual export products - was unsustainable, said some private-sector economists.

The decline was broad-based, with sales in electronics and non-electronics falling by 1.7 per cent and 2.5 per cent year on year respectively.

Month on month, NODX slumped by a seasonally adjusted 12.9 per cent in June, in sharp contrast to May which clocked growth of 16.8 per cent. This was due to a contraction in non-electronic NODX, which outweighed the growth in electronic NODX.

Here's what private-sector economists had to say about June's performance:

According to ANZ economist Ng Weiwen, June's contraction should be seen in the context of a "normalisation" from the sharp jump in May, which was "clearly unsustainable". May's NODX was distorted by a surge in gold exports which surged nearly five-fold.

Mr Ng added: "The pace of decline in electronic NODX also eased, reflective of some possible positive spillover from the regional mini tech upswing, which has buoyed both South Korea and Taiwan exports recently."

DBS senior economist Irvin Seah said: "The extent of the downswing has been more severe than anticipated. This is a yet again another reminder that prospects on the external front are not that bright after all."

Both economists pointed out that Singapore's largest export market, China, was continuing to weigh down on NODX performance, in line with a slowdown in the Chinese economy.

"With China's deceleration being a structural one, the lackluster NODX performance could last for a while," warned Mr Seah.