You are here

Update: Singapore exports fall 10.6% in July, fuel fears of economic contraction ahead

37796012 - 18_03_2016 - ymmas11.jpg
Singapore's non-oil domestic exports (Nodx) fell by 10.6 per cent in July 2016 to S$12.57 billion compared to a year ago due to the decline in electronic and non-electronic exports.

SINGAPORE'S non-oil domestic exports (NODX) fell by 10.6 per cent in July 2016 to S$12.6 billion compared to a year ago due to the decline in electronic and non-electronic exports.

The contraction was sharper than the 2.5 per cent decline expected by most economists, and the 2.4 per cent contraction in June.

On a month-on-month, seasonally adjusted basis, exports declined 1.8 per cent in July, missing a forecast of a 0.2 per cent rise in a Reuters poll.

According to International Enterprise (IE) Singapore, exports to all of the top 10 NODX markets, except the EU 28, decreased in July 2016. The largest contributors to the NODX decline were China (-16.6 per cent), the United States (-19.1 per cent) and Indonesia (-22.6 per cent).

Total trade declined by 11.1 per cent in July 2016 to S$68.9 billion compared to a year ago, following the 5.1 per cent decrease in June.

Your feedback is important to us

Tell us what you think. Email us at

Total exports contracted by 10.3 per cent to S$37.3 billion in July 2016, after the 3.7 per cent decline in the previous month. Total imports decreased by 12.1 per cent to S$31.6 billion in July 2016, following the 6.7 per cent contraction in the preceding month.

Electronic NODX contracted by 12.9 per cent in July 2016, following the 1.7 per cent decline in June. The decrease in electronic domestic exports was largely due to personal computers (-36.0 per cent), parts of ICs (-46.3 per cent) and diodes & transistors (-19.5 per cent).

Non-electronic NODX decreased by 9.5 per cent in July 2016, after the 2.6 per cent contraction in June. The decline was led by petrochemicals (-35.0 per cent), civil engineering equipment parts (-58.3 per cent) and specialised machinery (-16.7 per cent).

"Indeed, when it rains, it pours. This will add on to the long list of poor data pointing to the risk of an economic contraction ahead. Second quarter Gross Domestic Product (GDP) figures have been revised down. The official full year GDP growth forecast has been lowered. Economic numbers across the region are mostly heading down rather than up. The writing is on the wall. For those maintaining a sanguine view on the near term outlook on the economy, this should be a wake-up call," DBS's senior economist, Irvin Seah, said.

Mr Seah said the slowdown in China is a major concern but sluggish growth in the US and uncertainties surrounding the eurozone are not helping.

"In addition, commodity and energy prices have not recovered. These confluence of factors are essentially pointing in the same direction on growth outlook. And it's down, not up," he said.

Weiwen Ng, economist covering South and Southeast Asia at ANZ Research, said the July figures were the first indication of Brexit's impact on Singapore's trade, and the impact "has proven to be marginal", with exports to the EU-28 actually up 3 per cent on year.

"Growth will be a tad weaker in the second-half of 2016. Already, the services sector have contracted for 2 consecutive quarters, not seen since 2008-09. Thus, if services activity remains sluggish and electronic exports continue to decelerate (like in July) after a tech-led bounce, weaker growth in H2 2016 is almost a forgone conclusion," Mr Ng said.

UOB's economist, Francis Tan, said while the July NODX data was dismal, it did not change his outlook on the potential pick-up in global trading activities in the months ahead.

"The Baltic Dry Index, an indicator of global trade volume, had gained 136 per cent since February 2016 to date. This may bode well for global trading volume in the months ahead," he wrote in a note.

He added that the recovery in Singapore's manufacturing activities recently might bode well for exports in the coming months as it had reversed the contractionary trend seen over the past 18 months before that.

He also noted that IE Singapore reported that NODX registered flat growth in Q2 2016 - a recovery from the 9.0 per cent on year contraction in Q1 2016 as the exports of non-electronic NODX improved. Last week, IE Singapore narrowed its full-year NODX projection towards the upper end of its forecast range to between -4.0 per cent and -3.0 per cent.

"That said, we maintain our full year NODX growth forecast of a contraction of 2.5 per cent. This implies that second half performance would be better than the first half (-0.6 per cent on year in H2 versus -4.5 per cent on year in H1)," he said.

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to