Singapore July non-oil exports fall less than feared

SINGAPORE (Aug 16): Singapore's key non-oil domestic exports (NODX) fell by less than expected in July, although both shipments of electronics and non-electronics declined, according to data released by Enterprise Singapore on Friday.

Exports of non-oil goods made in Singapore fell 11.2% on year in July compared with a revised decrease of 17.4% in June, the biggest drop since shipments sank 33.2% in February 2013.

Exports had been expected to contract 14.8% on year, based on the median estimate from a Wall Street Journal poll of seven economists.

In seasonally adjusted terms, exports rose 3.7% on month, recovering from a 7.8% fall in June. The poll of economists had projected July exports would slip 3.5% on month.

Electronics exports slid 24.2% on year in July, while non-electronics shipments were down 6.6%. Exports of the volatile pharmaceuticals segment fell 32.7% on year, after an 11.3% fall in June.

Exports to all of Singapore's top 10 markets fell as well, except to the United States which rose 12.3%. Leading the decline were falling shipments to Japan, Malaysia and Hong Kong.

Exports to the EU fell 2.5% on year while exports to China slipped 5.0%.

Exports to emerging markets also declined by 29.6% last month, following a 17.0% fall in June.

Song Seng Wun, CIMB Private Banking economist, said June's plunge could be "the bottom of the current cycle, but double digit declines might persist over the next few months".

"Leading indicators such as orders are still weakening," says Song.

Separately, Oxford Economics said while the 3.6% fall in July was a slight improvement from the 7.3% decline in June, the outlook for exports remains challenging following more tariff hikes by the US and China in May and further increases threatened.

"We expect Singapore to dip into a technical recession in Q3 with GDP to grow by around 0.5% for the year as a whole," says Oxford who also expects the Monetary Authority of Singapore to ease monetary policy at its bi-annual October meeting, moving to a zero appreciation bias in the SG$NEER, the basket of currencies versus the SGD.

Data out on Tuesday showed Singapore's export slump deepened in the second quarter, with NODX contracting 14.6% compared to a year ago, its third straight quarter of decline.

On the back of this continued dismal performance, Enterprise Singapore slashed its NODX forecast to -9% to -8% for the year, down from the range of -2% to 0% which was revised in the first quarter.