Singapore downgrades 2016 Nodx forecast after a 5.4% fall in Q3

SINGAPORE'S 2016 forecast for its non-oil domestic exports (Nodx) has been downgraded to -5.5 to -5.0 per cent, from -4.0 to -3.0 per cent previously, due to a weaker-than-expected performance of electronic and non-electronic exports in the third quarter.

The revision came after Nodx fell by 5.4 per cent in Q3 2016 to S$38.6 billion compared to a year ago, following the previous quarter's decline of 0.2 per cent to S$40.8 billion The latest fall was attributed to a decline in electronic and non-electronic exports, according to IE Singapore on Thursday.

Electronic Nodx fell on lower domestic exports of personal computers (-15.9 per cent), integrated circuits (-3.1 per cent) and parts of personal computers (-16.7 per cent).

The decline in non-electronic Nodx was due to lower domestic exports of petrochemicals (-19.9 per cent), structures of ships and boats (-97.2 per cent) as well as civil engineering equipment parts (-44.3 per cent).

Nodx to all of the top markets, except Hong Kong and South Korea, declined in Q3 2016. The biggest contributors to the fall were China, Indonesia and the US. Nodx to China fell by 8.2 per cent; Indonesia down 15.9 per cent and the US down 7.7 per cent.

Total merchandise trade forecast for 2016 has been narrowed upwards to between -6.5 to -6.0 per cent, from -7.0 to -6.0 per cent, due to the improved performance of oil trade and non-oil re-exports (Norx) in Q3 2016.

In Q3 2016, total trade fell by 5.0 per cent from a year ago to S$211.9 billion due to a fall in oil and non-oil trade. This followed a 5.7 per cent decline in the previous quarter to S$212.0 billion.

Compared to a year ago, Singapore's total services trade increased by 0.1 per cent in Q3 2016, following the 2.3 per cent rise in the previous quarter. Total services trade reached S$97.7 billion for the quarter, down from S$98.6 billion in Q2 2016. Both total services exports and imports grew by 0.2 per cent and 0.1 per cent respectively in Q3 2016.

Looking ahead into 2017, IE Singapore said global growth is projected to pick up slightly as compared to 2016. This would be supported by improvements in the growth outlook for advanced and developing economies like the US, Japan, NIEs and ASEAN. Oil prices are also expected to improve in 2017 on the back of a further moderation in the surplus in global oil production.

"Against this backdrop, the 2017 forecasts for Nodx and total merchandise trade are at -1.0 to 1.0 per cent and 4.0 to 6.0 per cent respectively,'' IE said..