Singapore June data shows rebound in electronics

Non-oil domestic exports expanded 4.7% y/y in June. However, on a m/m sa basis, exports declined 2.4%, consistent with our expectation for a further m/m moderation from the March surge in and reflecting a larger seasonal factor this June due to one extra working day compared with previous years. 

The details showed a strong rebound in electronics exports, led by PCs, which alongside continued strength in rig-building offset weakness in volatile pharma shipments. This is in line with our view that electronics would see a cyclical rebound in the coming months as external demand improves, supported by continued strength in the US and a recovering Europe. 

"This was confirmed by the pickup in the electronics PMI to a five-month high of 50.3 in June, and the recovery in the sector is expected to continue in H2", says Barclays. 

While the cyclical recovery in electronics should provide some support to exports in the near term, in the medium term the structural out performance of non-electronics rig-building, pharmaceuticals, aerospace and engineering are expected to persist.