Singapore’s non-oil domestic exports (NODX) for July saw growth accelerate to 11.8 percent on-year, outpacing the 0.8 percent increase in June as expansion in the non-electronics segment offset the continued decline in electronics exports, according to data from Enterprise Singapore on Friday.
“The main driver of the pick-up and source of the upside surprise was pharmaceuticals export growth, which tends to be volatile and was boosted further by a favourable base effect,” Nomura said in a note on Friday. “As the base effect will reverse in August, we do not expect the strength in pharmaceuticals exports to sustain.”
It stuck with its forecast for gross domestic product growth to slow to a below-consensus 3.0 percent this year, from 3.6 percent last year.
“The economy remains susceptible to any escalation in trade protectionism or a tech cycle downturn,” Nomura said.
The Singapore dollar strengthened slightly on the data, with the dollar/Sing falling as low as 1.3745 after the release, from around 1.3763 before the release, according to DZHI data. The dollar/Sing was at 1.3755 at 8:55 A.M. SGT.
Electronics NODX fell 3.8 percent on-year in July, slower than June’s 8.6 percent fall, with ICs, diodes and transistors and parts of PCs contributing the most to the decline, it said.
“Electronics exports are likely to remain weak on signs of a slowdown in global semiconductor shipments and broad electronics demand,” Nomura said.
Non-electronics NODX expanded 18.8 percent on-year in July, faster than June’s 4.5 percent rise, led by pharmaceuticals and food preparations more than doubling, while primary chemicals rose 41.3 percent on-year, it said.
NODX to seven of the top 10 markets rose in July, with Hong Kong, South Korea and Thailand the exceptions, it said. NODX to the U.S. rose 33.7 percent led by food preparations, pharmaceuticals, paints, printing ink and other coloring materials, while NODX to Japan rose 53.9 percent and Indonesia was up 42.8 percent, it said.
Total trade increased 17.6 percent on-year in July, extending June’s 10.2 percent increase, while total exports rose 13.7 percent on-year in July, up fro 8.0 percent growth in June, and total imports expanded 22.1 percent on-year in July, after rising 12.7 percent in June, the release said.
On a month-on-month basis, NODX rose 4.3 percent in July, after June’s 11.1 percent on-month decline, the release said.
This article was originally published on Friday, 17 August 2018 at 9:00 A.M. SGT; it has since been updated to include comments from Nomura.