Singapore’s non-oil domestic exports, or NODX, rose 8.3 percent on-year in September, expanding more than August’s 5.0 percent growth, as an increase in non-electronic exports outpaced a decline in the electronics segment, according to data from Enterprise Singapore on Wednesday.
Nomura said in a note on Tuesday that the growth missed its forecast for an 18.4 percent increase and a consensus forecast for an 11.1 percent rise.
“The increase was mainly due to a favorable base effect,” Nomura said, pointing to the on-month figures.
On an on-month basis, NODX for September declined 4.3 percent after edging up 0.4 percent in August on a decrease in both electronic and non-electronic exports, it said.
“Overall, we do not expect NODX growth to sustain at these levels, as it has been primarily the result of a favorable base effect, which should reverse in October,” the investment bank said.
Nomura kept its Singapore gross domestic product (GDP) growth forecast at 3.5 percent for this year, while expecting the pace to slow to 2.5 percent next year.
“Cyclical tailwinds from exports – particularly from the electronics sector – continue to fade and structural challenges persist, leaving the economy susceptible to an escalation in trade protectionism and a pronounced tech-cycle downturn,” Nomura said.
The Singapore dollar barely budged on the data, with the dollar/Sing at around 1.3739 before the data and around 1.3733 shortly afterward.
Electronics NODX falls
Electronics NODX fell 0.9 percent on-year in September, following August’s 1.5 percent decline, it said, adding that PCs, diodes and transistors, and parts of ICs contributed the most to the decrease.
The decline in electronics exports is in part due to a high base, as well as a downtrend in the global technology cycle; the U.S. trade war may also be affecting demand.
Non-electronics NODX rose 11.9 percent on-year in September, growing faster than August’s 7.8 percent rise, with pharmaceuticals, non-monetary gold and food preparations contributing the most to the expansion, it said.
The largest contributors to the NODX increase were the U.S., the EU and Thailand, while shipments to China, South Korea, Malaysia, Taiwan, Japan and Hong Kong fell, Enterprise Singapore said.
Total trade for the month was up 13.5 percent on-year after rising 13.3 percent in August, with total exports up 11.4 percent in September and total imports rising 16.0 percent, it said.
On a seasonally adjusted basis, NODX was at S$15.0 billion in September, down from August’s S$15.6 billion, but up from S$13.3 billion in September 2017, it said.