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April NODX down 9.8% y-o-y, OCBC maintains full year estimate of 3% contraction

OCBC's Ling sees risk that electronics recovery might be delayed till early 2024

Trade volume shrank again in April, and economists expect this trend to persist till the third quarter this year.

Non-oil domestic export (NODX) for April was down 9.8% y-o-y, a steeper decline versus the 8.3% drop seen in March, says Enterprise Singapore on May 17.

Exports to key markets such as China, Malaysia and Taiwan dropped, although corresponding NODX numbers to US, the EU27 and South Korea increased.

Totally trade, which includes both exports and imports, dropped by 18.8% y-o-y in April, reversing the 7.9% y-o-y growth chalked up in March.


OCBC’s chief economist Selena Ling, who is keeping her 2023 nodx forecast of down 3% y-o-y, expects NODX to continue to contract into the third quarter.

“Recent trade data prints from Indonesia, Taiwan and South Korea have also been less than constructive,” says Ling.

“Even assuming that NODX demand from the US continues to hold up near-term (notwithstanding recent recession concerns from the market and still hawkish Fed rhetoric), the global demand engine prognosis still looks vulnerable, especially if China’s reopening pace remains tepid,” she adds.

Similarly, UOB economist Alvin Liew expects a few more months of y-o-y declines of the NODX before some improvement in the second half of the year. He is keeping his full year forecast of a 5.5% drop in NODX.

Ling sees risk that the global electronics industry demand turnaround may be pushed out from second half this year to end of the year, or even early 2024. If so, this would “not be music to the ears of key electronics exporters.”

Maybank economists Chua Hak Bin and Lee Ju Ye have turned even more pessimistic, as they downgraded their 2023 NODX forecast range from down -7% to -4%, to -9% to -6%.

“The boost from China’s reopening remains elusive as its recovery has largely been driven by domestic services, while manufacturing remains subdued,” write Chua and Lee in their May 17 note.

They now expect a higher possibility of a recession in Singapore in the coming 12 months, if the boost from China’s reopening fails to materialise in the second quarter.

Manufacturing and trade-oriented services continue to decline, and thus, Chua and Lee expect 1Q GDP, to be released next week, to barely grow at +01%, unchanged from the advance estimate released last month.

The official forecast, for now, is -0.5% to 1.5%, which was lowered from +0.5% to 2.5%.

For now, they’ve kept their 2023 GDP forecast at +0.8%.



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