Singapore non-oil exports growth eases in August to 5%; beat forecasts

GROWTH of non-oil domestic exports (NODX) eased in August but still beat forecasts, with a year-on-year rise of 5 per cent following July's unexpectedly high 11 per cent expansion, according to Enterprise Singapore data released on Monday. Economists had forecast August's NODX growth to be 3.9 per cent.

NODX growth continued to be led by non-electronic NODX, which grew by 7.8 per cent, compared to 18.6 per cent the month before. Pharmaceuticals, food preparations and measuring instruments contributed the most.

Electronic NODX continued to decline, though at a milder pace, shrinking 1.5 per cent in August compared to 5.8 per cent in July. Diodes and transistors, parts of personal computers and integrated circuits contributed most to the decline.

Despite August's forecast-beating growth, economists' expectations for the rest of the year were muted. ING chief economist Robert Carnell said the "good news" was that there seems to be no discernible downtrend, but added: "The headline has been narrowly supported in recent months though, so we are nervous that if this support fails in coming months, we could be looking at something much weaker."

UOB senior economist Alvin Liew was "less sanguine" about the NODX outlook. Noting that electronics exports remained weak, he expects the high base effects from 2017 to continue weighing on electronics NODX growth for the rest of 2018. Ongoing trade tensions between the United States and China remain a concern, he added. UOB has lowered its forecast for full-year NODX growth to 5.5 per cent, down from its previous 6.5 per cent estimate.

Exports to a slight majority of Singapore's top 10 markets grew in August, driven mainly by the United States, the European Union and Indonesia. The exceptions were China, South Korea, Hong Kong and Japan.

Non-oil re-exports (NORX), seen as a proxy for the wholesale trade, grew 14.1 per cent in August, extending the 8.4 per cent increase in July, due to increases in both electronics and non-electronics NORX.

Total trade rose 13.3 per cent in August, less than July's 17.4 per cent rise, supported by growth in both exports and imports.