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NODX forecast slashed to -9 to -8% for 2019; Q2 performance sinks by double-digits

SINGAPORE’S key non-oil domestic exports (NODX) sank by double digits in the second quarter, contracting by 14.6 per cent compared to a year ago, Enterprise Singapore said on Tuesday.

This is a much steeper fall compared to the 6.4 per cent drop seen in the first quarter, and is Singapore’s third straight quarter of NODX decline.

On the back of the continued dismal performance, Enterprise Singapore slashed its NODX forecast to -9 to -8 per cent for the year, down from the range of -2 to 0 per cent which was revised in the first quarter.

NODX in the second quarter was dragged down by both electronics and non-electronics.

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Electronics exports dived by 26.9 per cent in Q2, extending further from its 17.2 per cent decline in the preceding quarter. Integrated circuits, disk media products and personal computers contributed to the decrease in electronic NODX, falling by 32.2 per cent, 38.7 per cent and 15.9 per cent respectively.

Non-electronic shipments also fell by 10.5 per cent, following the 2.6 drop in the previous quarter. This was mostly led by civil engineering equipment parts (-80.9 per cent), non-monetary gold (-32 per cent) and petrochemicals (-15 per cent).

NODX to all of Singapore’s top markets, except the US, fell in Q2, with China (-14.6 per cent), the EU 28 (-17.5 per cent) and Japan (-28.5 per cent) coming in as the biggest contributors to the decline.

Enterprise Singapore attributed the “weaker than expected” showing in Q2 to the global electronics downcycle, as well as generally sluggish global final demand and trade conditions. Lower oil prices amid weak global demand further weighed on oil trade in nominal terms and in turn total trade, said the government agency.

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The downgraded forecast for 2019 comes as global economic and trade growth is expected to further moderate, with a weaker growth outlook for Singapore’s key trade partners such as China, Asean and Japan, while lower oil prices are expected to dampen the oil trade, Enterprise Singapore said.

Separately, the Ministry of Trade and Industry (MTI) also cut its official full-year forecast for the second quarter running on Tuesday, with gross domestic product (GDP) expected to come in between zero growth and 1 per cent for the full year, compared to the range of 1.5 to 2.5 per cent previously. The latest downgrade came as the MTI affirmed its flash estimate for second-quarter GDP growth of 0.1 per cent.