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Quick takes: Singapore's April export growth beat expectations, but still soft

Monday, May 18, 2015 - 14:50

SINGAPORE'S non-oil domestic exports (NODX) slipped back to a slower 2.2 per cent year-on-year (y-o-y) expansion in April after an 18.5 per cent increase in March, International Enterprise Singapore unveiled on Monday.

Here are some economists' comments:

Francis Tan, UOB Global Economics and Markets Research:

"The growth in April came as surprise and exceeded consensus expectations of a 5 per cent year-on-year decline.

"Last month, we had advised caution on the exceptionally strong NODX figures and that it would not likely repeat in April's release. Although coming in with a positive growth in April, it was really due to the strong growth rates of some of the more lumpy non-electronic segments. The electronics NODX segment continue to disappoint.

"We still maintain our 2015 NODX forecast of a 1% contraction, as we continue to see a slowdown in PC-related electronics exports as well as the trend where manufacturers shift focus to the export of services rather than merchandise.

"We also expect the exports of petrochemicals to come under pressure as the current oil price weakness persists at least in 1H 2015. Recent weaker manufacturing PMI releases from a couple of economies that are amongst Singapore's top trading partners will also weigh on the prospects of exports over the next few months. These economies include China, Eurozone, Indonesia, and Japan."

Selena Ling, Head, Treasury Research & Strategy, OCBC Bank:

"April NODX beat market expectations, but remained soft.

"NODX growth was largely supported by non-electronics NODX which compensated for the still weak NODX exports. While non-electronics exports expanded by 4.7% yoy in Apr, following a 21.6% gain in Mar, this was led by the volatile structures of ships & boats (+3,566.7%), and non-electric engines & motors (+253.2%).

"There were few bright spots in the key NODX markets for now. Of the top 10 NODX markets, the only bright spots were the EU28 (+11.4% yoy, boosted by pharmaceuticals, PCs and non-electric engines & motors) and S. Korea (+30.6% yoy, aided by ICs and civil engineering parts).

"The other key NODX markets remained in the doldrums, suggesting that external demand was still soft. Notably, NODX exports slid back into declines for key markets like US (-8.3%yoy), China (-5.1%), Japan (-1.7%), Malaysia (-4.2%) and Indonesia (-4.2%).

"As such, we would not hold our breath for a stronger NODX pick-up in 2Q15 as yet, even with the low base in May-June 2014."

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