Singapore August NODX registers flat growth, near-term outlook remains jittery

Non-oil domestic exports (NODX) of Singapore registered a flat growth during the month of August, an improvement over the downfall witnessed in the previous month. However, the near-term cyclical trend for the country’s NODX still remains down.

While this could be seen as an improvement from the drastic 10.6 percent plunge in the previous month, it is partly due to the low base in the same period last year. Plainly, the export sector is not out of the woods yet. Sequentially, NODX fell by 1.9 percent m/m, on a seasonally adjusted basis, following a similar pace of decline in the previous month.

Indeed, nothing has changed in the external environment to warrant an improvement at this juncture. PMIs of key markets are in general turning south rather than northward. A slowdown in China is the main concern.

Further, sluggish growth in the United States, compounded with the risks of the Fed hike and the upcoming US election will continue to weigh down on the global outlook. The uncertainties surrounding a post-Brexit Eurozone will add to a potent mix of downside risks to export performance and growth.

"The next few months will be tough going for any export-dependent economy, including Singapore," DBS commented in its latest research report.