Singapore’s NODX remains flat in August, likely to shrink 4 pct y/y in 2016

Singapore’s non oil domestic exports (NODX) remained flat in August in year-on-year terms. On sequential basis, exports dropped 1.9 percent seasonally adjusted, according to International Enterprise Singapore. The data came in above market projections.

Non-electronics NODX increased up 2.7 percent year-on-year in August, as compared with July’s drop of 9.5 percent, while electronics exports fell less severely by 6 percent, as compared with July’s decline of 12.9 percent. This is an improvement from July NODX that had shrunk 10.6 percent year-on-year and 1.9 percent month-on-month.

In non-electronics, exports increased in non-electric engines and motors, structural parts made of iron, steel and aluminium, and specialized machinery. The higher exports of these components were countered by decline in exports of petrochemicals and pharmaceuticals. Within electronics, exports of disk drives, PCs and ICs continued to shrink. Only exception was exports of disk media products that rose 1.7 percent year-on-year. Widespread weakness continues to remain in several of the electronics industries.

Out of the top ten NODX markets, six of them witnessed growth in August. Taiwan led with rise of 22.2 percent year-on-year, followed by Hong Kong and the U.S. This is due to rebounding non-electronics NODX. Meanwhile, EU led the declining NODX by market that fell back into negative territory after posting positive growth in July as both electronics and non-electronics demand dropped, affirming the view that July was a blip, said OCBC Economist in a research report. Other NODX top markets that recorded a contraction in August were Indonesia, Japan and China.

NODX performance is expected to stabilize, but continue to be uneven in the coming months. The moderate rise in the U.S. economy, eased by sluggish growth in Japan, Euro area and continued slowdown in China, indicate towards a larger dependence on regional trade momentum driven by domestic demand.

“We tip 2016 NODX growth to be -4 percent yoy, with the year-to-date currently running at -4.1 percent yoy”, added OCBC Economist.