Exports shrank at a lower pace last month, Latest Business News - The New Paper

Exports shrank at a lower pace last month

This article is more than 12 months old

8.1% drop last month is a slight improvement from August performance

Exports shrank for the seventh month in a row, even though the pace of contraction eased.

Non-oil domestic exports (Nodx) fell by 8.1 per cent last month, a somewhat better showing than the 9 per cent fall in August, according to data released yesterday by Enterprise Singapore.

This was the third month in a row where shipments improved.

The August figure - revised down from the 8.9 per cent fall previously reported - also marked a return to single-digit territory after five straight months of double-digit declines.

But analysts polled by Bloomberg had been more optimistic for last month, expecting a 7.2 per cent fall.

On a seasonally-adjusted, month-on-month basis, exports were down 3.3 per cent last month.

Some economists expect to see exports improve in the rest of the year, but stressed the downside risks from the US-China trade tensions.

Maybank Kim Eng economists Chua Hak Bin and Lee Ju Ye said that Nodx may see some improvement in the last quarter of the year, given the lower base of comparison a year ago.

Economist Tan Khay Boon, a senior lecturer at SIM Global Education, also said that there may be stronger demand towards the end of the year.

"However, any meaningful rebound is only possible after an agreement has been reached between the US and China."

On the other hand, UOB economist Barnabas Gan said the slack in semiconductor exports across the Asia Pacific is still being observed in Singapore, suggesting that the maturing global electronic cycle could still drag both exports and manufacturing momentum into the months ahead.

Electronics products weighed down Nodx, shrinking 24.8 per cent year-on-year in September, following a 25.9 per cent contraction in August.

Integrated circuits, personal computers and disk media products contributed most to the decline.

Non-electronic exports contracted by 2.3 per cent - the same rate as in August. Pharmaceuticals, petrochemicals and jewellery caused the most drag.

Exports to the majority of Singapore's top markets fell, except to China and Taiwan.

The biggest declines in shipments were to Japan with a 19.2 per cent drop, the European Union at 17.3 per cent, and Hong Kong at 11.9 per cent.

Exports to emerging markets declined by 22.4 per cent last month, worse than the 19.6 per cent fall in the previous month.

Overall, both total imports and total exports decreased last month.

Dr Chua and Ms Lee noted that the better Nodx data was inflated by a surge in non-monetary gold exports to China, while electronics exports to China plunged at a steeper pace.