Non-oil domestic exports drop 0.7% in April
Slump in pharmaceutical sector stalls Singapore exports
"The weak April export numbers are a temporary blip from the trade recovery that Singapore has been witnessing for the past five months." - Maybank Kim Eng economists Chua Hak Bin and Lee Ju Ye
Exports have been on a winning streak, but an unexpected slump in the volatile pharmaceutical segment stalled the recovery last month.
Non-oil domestic exports contracted 0.7 per cent last month over the same month a year earlier. This came after five straight months of growth and was in contrast to expectations of a 13 per cent expansion.
But some economists remain optimistic that last month's numbers are a temporary blip.
Trade-related sectors, especially electronics manufacturing, have enjoyed a significant turnaround since late last year.
Much of the decline was attributed to volatile pharmaceutical shipments, which plunged 39.9 per cent over April last year. Exports of non-electric engines and motors, as well as non-monetary gold, also sank.
These declines offset a 4.8 per cent expansion in electronics non-oil domestic exports - their sixth straight month of growth - to yield last month's negative reading.
Maybank Kim Eng economists Chua Hak Bin and Lee Ju Ye said: "The weak April export numbers are a temporary blip from the trade recovery that Singapore has been witnessing for the past five months.
The weak April export numbers are a temporary blip from the trade recovery that Singapore has been witnessing for the past five months.Maybank Kim eng economists Chua Hak Bin and Lee Ju Ye
"Electronics exports are still expanding at a healthy pace and are more representative of global demand. We think Singapore's exports and manufacturing will continue to be well supported for the rest of this year, albeit at a more moderate pace."
Non-oil domestic exports had been expanding at an average rate of 14 per cent per month in the five months preceding April, as a more sanguine global outlook lifted Singapore's economy out of a protracted trade slump.
United Overseas Bank economist Francis Tan agreed that the dip was likely a one-off occurrence and expected non-oil domestic exports to record positive growth this year after four years of contraction.
Still, he said: "We are also expecting that the strong double-digit (export) growth since November 2016 cannot be sustained into the second half of 2017. This is especially since recent trade numbers reported by Asian economies also point to a slower growth rate."
Mr Johnny Mok, assistant general manager of electronic component assembly firm Add-Plus, said sales have picked up 10 per cent to 15 per cent in the first half of this year, compared with the same period a year earlier.
He said: "Things have been booming on the semiconductor side... that should eventually benefit us. It remains to be seen whether it can be sustainable."
But he added that companies like his are still feeling the crunch from manpower shortages.