Singapore key exports down 15.5% in June in ninth straight month of decline
Sharon See
SINGAPORE’S export growth is likely to remain weak, economists said, after fresh data revealed nine straight months of contraction in June.
Non-oil domestic exports (NODX) fell 15.5 per cent year on year in June, on the back of declines in both electronic and non-electronic shipments, extending the previous month’s decline, data from Enterprise Singapore (EnterpriseSG) showed on Monday (Jul 17).
This was in line with the 15.6 per cent decline that private-sector economists polled by Bloomberg were expecting. In May, NODX fell by a revised 14.8 per cent year on year.
On a seasonally adjusted monthly basis, however, NODX grew 5.4 per cent in June to S$14.5 billion, improving from the previous month’s 14.6 per cent contraction.
“While we think a couple more months of year-on-year contraction appear likely, given global external headwinds, there are tentative signs that NODX might be stabilising in seasonally adjusted level terms, with June’s 5.4 per cent month-on-month increase,” said DBS economist Chua Han Teng.
Electronic exports fell 15.9 per cent in June, easing from the 27.2 per cent contraction in the preceding month. Personal computers and their parts contributed the most to the decline – shipments of both slumped by more than 44 per cent.
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Non-electronic shipments contracted 15.4 per cent in June, extending the previous month’s 10.7 per cent decline. In particular, exports of primary chemicals tumbled 61.8 per cent; those of petrochemicals contracted 34 per cent, and pharmaceuticals, 29.5 per cent.
Overall, total trade shrank by 19.2 per cent in June, extending the 17.9 per cent decline in the previous month. Sequentially, total trade grew by 3.4 per cent in June, reversing the 5.7 per cent contraction in May.
Key exports to Singapore’s top 10 markets as a whole declined in June, with shipments to all markets shrinking except for those to Hong Kong and China.
The largest contributor to the decline in NODX was Indonesia, with a contraction of 35.7 per cent. This was followed by Malaysia at 30.7 per cent and South Korea at 24.2 per cent.
In contrast, exports to Hong Kong jumped 41.9 per cent, swinging back from May’s 41.2 per cent decline. Exports to China rose 3.1 per cent.
Maybank economists Chua Hak Bin and Brian Lee said China’s reopening finally appears to be giving exports “some lift”, but they added that the modest boost was insufficient to offset tepid demand from other regions.
OCBC chief economist Selena Ling said “a note of caution” may be necessary in assessing whether the NODX recovery for the Chinese market is sustainable.
This is because China’s economic indicators have shown “waning growth momentum in recent months, which, coupled with very targeted and calibrated policy stimulus, contributed to weak market sentiments”, she said.
Ling said even if the pace of NODX contraction moderates in H2, the external growth environment remains soft and the demand conditions for Singapore’s key NODX markets are still facing headwinds including hawkish major central banks in the short term.
Concurring, UOB senior economist Alvin Liew noted that the fact that NODX to the United States turned negative in June – it shrank by 1.8 per cent compared with a growth of 4.8 per cent in May – has only added more gloom to the demand outlook for developed markets.
In May, EnterpriseSG slashed its full-year outlook for NODX, expecting it to contract 8 per cent to 10 per cent, instead of zero growth to a contraction of 2 per cent.
Economists’ full-year NODX outlook is not too far off from the official forecast. UOB and OCBC are expecting exports to shrink 10 per cent; RHB, 8 per cent; and Maybank, 6 per cent to 9 per cent.
OCBC’s Ling noted that NODX has slumped 14.8 per cent year on year in H1 – the weakest first-half performance since 2009, when exports tumbled 20.3 per cent year on year over the same period.
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