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Quick takes: Fall in Singapore's May exports seen as temporary, recovery on track

SINGAPORE'S non-oil domestic exports (NODX) decreased slightly by 1.2 per cent in May 2017 on a year-on-year basis, according to figures released by International Enterprise Singapore on Friday. Here are some views from experts.

DBS senior economist Irvin Seah:

"Exports are showing some lethargy... Non-electronics exports continued to be the key drag (-9 per cent) but electronics exports remained fairly buoyant, rising 23.3 per cent in the month, up from 4.8 per cent previously. While one can argue that the decline in the headline NODX figure is due to non-electronics exports' high base, we prefer to see it as another clear sign that the export rally is losing steam. This is consistent with our view that export demand may be peaking."

UOB economist Francis Tan:

"The two consecutive months of on-year contraction in Singapore's NODX seem alarming to many market watchers, especially since it was growing at an average 14 per cent over the five months prior to that. However, we think that this is only temporary, especially since May 2016 was a high base month. NODX growth rates are notoriously volatile and a single month of technical pullback should not veer us off course in our longer term view of the recovery in global trade for 2017."

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Citibank economist Kit Wei Zheng:

"External demand remains on track to support growth, though momentum is moderating. Stronger than expected trade numbers showed a technical rebound after a surprising fall in April. Put together, the data suggests that the external demand recovery remains on track. Of particular note is the continued acceleration in semiconductor exports, which rose sequentially for the second month after three previous months of decline, suggesting that the upswing from the tech cycle remains intact."

Selena Ling, head of treasury research & strategy, OCBC Bank:

"The two straight months of NODX declines is not a cause for concern at this juncture amid the healthy electronics momentum and resilience in key NODX markets. NODX growth is coming off a very strong Q1 2017 and January-May NODX growth is already 8.8 per cent y-o-y. So some normalisation is to be anticipated, but electronics exports remains the key to watch going ahead."

Ng Weiwen, economist, Asean, ANZ Research:

"Today's NODX print reinforces our view of a two-speed trajectory within Singapore's export and manufacturing cycle. Specifically, Singapore's electronic exports have been strong, continuing to expand for the seventh straight month. By contrast, non-electronic exports have softened in recent months. The firm electronic exports and output in recent months may partly reflect inventory building ahead of high-profile smart phone launch later this year."

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