Non-oil domestic exports (NODX) in Singapore during the month of June is expected to moderate, compared to that in the previous month, though remaining within the positive territory, as external demand seems dull amid an environment of economic and political uncertainty that will likely weigh on export demand.
The headline non-oil domestic exports (NODX) growth figure due on Monday is expected to register a modest expansion of 1.2 percent, down from the 11.6 percent surge in the previous month. This shall pose a gentle reminder that the prospects on the external front are not that bright after all and this is despite the better than expected advance GDP estimates in the second quarter, DBS reported.
"Sequentially, expect a pullback of about 3 percent m/m, seasonally adjusted after a 16.8 percent surge in the previous month," DBS commented in its report.
NODX sales during the month of May remained strong, largely due to a spike in unusual export products, which is unlikely to sustain in the long term. Non-electronics jumped by 19 percent y/y, driven by the exports of prefabricated buildings and non-monetary gold that rose 436.7 percent.
The unusual rise in May’s NODX has masked an otherwise sluggish growth outlook. Such anomaly will likely dissipate in June, which makes for the "fall back to reality" for NODX figures, the report said.
Meanwhile, purchasing manufacturers’ indices have dipped lower in June. Overall manufacturing PMI posted a decline of 0.2 pt to 49.6 in the month. Electronics PMI inched lower to 49.0, down 0.1 point. These set of figures underscored the fact the export growth in Singapore cannot possibly be great amid an environment where the global economy is facing external headwinds.
