Flash Notes-Singapore: Brief Reprieve As NODX Gained 6% In August

Singapore’s non-oil domestic exports (NODX) expanded 6.0 y/y in August, partially due to low base effects, andwas much higher than market estimates of a 2.5% y/y gain and the 3.3% y/y decline in July. The August expansionwas a temporary reprieve from the past three consecutive months of decline that was due to poor performance inboth electronic and non-electronic exports. On a seasonally-adjusted m/m basis, NODX rose 7.6%, following the 2.5%increase in July.

    The increase in non-electronic NODX outweighed electronic NODX in August. Non-Electronic exports rose 12.1% y/y,compared to the 1.1% y/y contraction in July, as segments like petrochemicals (+39.9% y/y), pharmaceuticals (+26.9%y/y), and structures of ships & boats (+1,337.8% y/y) contributed with strong on-year growth.

    However, electronics exports continued to decline for the 25th consecutive month and fell 6.9% y/y in August,slightly worse than consensus estimates of a 6.4% y/y decline. Again, PC-related exports remained weak as partsof PCs fell 17.3% y/y, while disk drives contracted 22.5% y/y. ICs exports also fell 4.2% y/y in the same month.

    Non-oil re-exports (NORX) fell 5.6% y/y in August after the 1.7% y/y decline in July, as both electronic and nonelectronicNORX declined. Nevertheless, on a m/m SA basis, it was a 1.1% increase in August compared to the 6.2%contraction in the previous month.

    Singapore’s NODX remained weak so far this year. In the first eight months, NODX declined 1.4% y/y as the 3.5% y/ygain in non-electronic exports failed to negate the weakness in electronic exports (-11.8% y/y). With electronic exportscontracting for a sustained 25-month period, electronic exports had been playing a smaller part in Singapore’s NODX.

    For example, the share of electronic NODX in overall NODX had declined to 28.6% this year. This compared to the 66%and 41% share during 2000 and 2010 respectively.

    After today’s release, we still maintain our 2014 NODX growth forecast of -1.0% as risks of poor performance ofelectronic NODX dragging overall NODX growth continues. Singapore’s trade agency also maintains their forecast forSingapore’s 2014 NODX growth to between -2.0% and -1.0%. Our -1% contraction for NODX in 2014 implies that overallNODX growth for September until the end of this year will come in flattish (-0.2% y/y).