Singapore non-oil exports down 8.9% in August, better than expected

SINGAPORE'S non-oil domestic exports (NODX) fell 8.9 per cent year on year in August, performing better than economists' expectations of a 10.6 per cent fall and breaking a five-month streak of double-digit declines, according to Enterprise Singapore figures on Tuesday.

The August decline eased from July's 11.4 per cent fall, in the second consecutive pick-up since June's six-year low. On a month-on-month seasonally adjusted basis, NODX rose 6.7 per cent in August, strengthening from July's 3.5 per cent growth.

Electronic NODX was down 25.9 per cent year on year in August, steepening from the previous month's 24.2 per cent fall. Contributing the most to this decline were contractions in exports of integrated circuits (-32.1 per cent), PCs (-28.6 per cent), and disk media products (-11.9 per cent).

However, economists noted that this was due partly to a high base effect from 2018, with OCBC Bank head of treasury research and strategy Selena Ling adding that "the underlying electronics momentum appears to be stabilizing with the second month of month-on-month growth".  

Non-electronic NODX declined 2.2 per cent, easing from the previous month's 6.7 per cent fall. Contributing most to the decline were pharmaceuticals (-23.6 per cent), petrochemicals (-20.8 per cent) and primary chemicals (-29.3 per cent).

Barclays economist Brian Tan highlighted a boost given by exports of non-monetary gold, which more than doubled in August (up 133 per cent). "Excluding pharmaceuticals and gold, NODX would have fallen more sharply, by 15.5 per cent year on year in August compared to the 9.2 per cent drop in July," he noted.

NODX to nine of Singapore's top 10 markets declined year on year, with China being the exception with 38.5 per cent growth. The fall was led by Hong Kong (-32 per cent), the United States (-15 per cent), and Malaysia (-19.7 per cent).

It remains to be seen if the NODX growth rebound for China - from a 5.1 per cent fall in July - can be sustained, said Ms Ling: "At this juncture, it is difficult to determine how much of the pickup was due to front-loading activities ahead of the Sept 1 tranche of US tariffs against Chinese imports or due to the lower NODX base in 2H18."

Mr Tan expects the economy to avoid a technical recession in the third quarter, but for MAS to nonetheless loosen monetary policy at its upcoming October meeting.