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Singapore non-oil exports back in the black in February, defying economists' expectations

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Singapore’s export sector heaved a sigh of relief as it swung back into the black in February, buoyed by a rise in non-electronic shipments and surprising economists on the upside as most had expected a fourth consecutive month of decline.

SINGAPORE’S export sector swung back into the black in February, buoyed by a rise in non-electronic shipments and surprising economists on the upside as most had expected a fourth consecutive month of decline.

Non-oil domestic exports (NODX) grew by 4.9 per cent last month, reversing from a worse-than-expected slide of 10.1 per cent in January, which was the biggest drop since October 2016. A Bloomberg poll of economists had projected that NODX would fall 1.6 per cent in February.

But economists are not overly optimistic that this upward momentum is likely to continue as the external environment remains clouded due to the US-China trade war.

OCBC economist Selena Ling pointed out that February's positive numbers were largely attributable to a low base last year due to the timing of the Chinese New Year festive season.

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She said: "Given that recent global growth forecast downgrades suggest rising business caution ahead amid a waning technology cycle, and recent economic data prints for China also remained mixed, there is little evidence to suggest that a turnaround in global demand is round the corner at this juncture."

She cited other developments, such as the US-China trade negotiations remain unsettled, with the Trump administration continuing to emphasise enforcement, and the Trump-Xi summit being postponed to at least April.

Maybank Kim Eng economists Chua Hak Bin and Lee Ju Ye concurred that it is "still too soon" to call February's turnaround an inflection point. 

"Asean countries, including Singapore, may also be seeing some early signs of trade and demand diversion from the US-China trade war," they added.

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Last month’s NODX figures were boosted by the non-electronic product shipment, which grew by 9.4 per cent compared to the 7.9 per cent decrease in January. Non-monetary gold, pharmaceuticals and food preparations contributed the most to the increase in non-electronic NODX.

The jump in non-electronic exports helped to offset the continued decline of electronics, which slid by 8 per cent in February, easing from the 15.9 per cent decrease in the previous month. Disk media products, personal computers, and diodes and transistors contributed the most to the contraction in electronic NODX.

On a month-on-month seasonally adjusted basis, NODX expanded by a whopping 16 per cent in February after the previous month’s 5.7 per cent decline, due to the growth in both electronic and non-electronic NODX.

Exports to the majority of the top markets increased in February, except Japan, South Korea, the European Union and Indonesia. The largest contributors to NODX growth were China, Hong Kong and the US.