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Quick takes: Singapore's NODX prospects remain tepid in the first-half of 2016

Wednesday, February 17, 2016 - 09:54
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SINGAPORE'S non-oil domestic exports (NODX) started the year with a worse than expected 9.9 per cent year-on-year (yoy) plunge, marking its third straight month of contraction as shipments to all top 10 markets, except the EU 28 and Malaysia, declined.

January NODX came in at S$12.3 billion. The fall was attributed to a contraction in both electronic and non-electronic NODX.

Economists polled by Reuters were expecting January NODX to fall an average of 7.4 per cent from a year earlier.

IE Singapore also unveiled on Wednesday that total trade contracted by 14.4 per cent in January to S$64.7 billion, following the 8.4 per cent decline in the previous month.

Here are some analysts' comments:

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

"This is worse than the 7.2 per cent yoy contraction (-0.3 per cent month-on-month seasonally adjusted) reading in Dec and the -7.5 per cent yoy (+3.5 per cent mom sa) we anticipated, albeit the Jan 2015 base was relatively high at +4.3 per cent yoy."

"Broad-based weakness was clear across our key markets - only 2 of the top 10 NODX markets rose in Jan, namely EU28 (+14.3 per cent yoy) and Malaysia (+2.8 per cent), whilst the biggest drags came from the Greater China markets with China (-25.2 per cent), Taiwan (-26.5 per cent), and Hong Kong (-9.6 per cent), as well as Indonesia (-11.4 per cent)."

"Looking ahead, S'pore's NODX prospects remain tepid in 1H16. We tip 2016 NODX growth at a marginal 0-1 per cent yoy, versus the -0.1 per cent yoy seen in 2015."

Weiwen Ng, Economist, ASEAN and Pacific, ANZ Research:

"Singapore exports remain in a funk. Singapore non-oil domestic exports remain in search of footing, showing no signs of nascent revival as we turn into the new year, registering a sharper than expected contraction of close to 10 per cent yoy in Jan.''

"...Singapore must leverage on the rising tide of services trade. Any positive impetus from the merchandise trade channel will be marginal given the secular shift towards services in both the US and China which translates to lower merchandise imports from traditional partners. The reconfiguration of the regional supply chain - with China embracing vertical integration - would be negative for merchandise trade."

"This ongoing trade recession has had already a knock on impact on externally-oriented sectors and we are pencilling significant downward revision in the final estimate of Q4 GDP due later February.''

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