Singaporean NODX contracts further in October, suggests weak start to Q4 2019 growth momentum

Singaporean non-oil domestic exports contracted in October. On a year-on-year basis, the NODX shrank 12.3 percent after declining 8.1 percent in the prior month. Sequentially, NODX contracted 2.9 percent after shrinking 3.3 percent in the prior month. Today’s data is worse than market forecast of a decline of 10 percent year-on-year and a fall of 0.8 percent month-on-month. Compared with the prior month’s print, September figure appeared to be a softening in NODX growth momentum again, noted OCBC Bank in a research report.

The weakness in NODX is mainly due to the high base in October 2018 from non-electronics NODX which dropped 11 percent year-on-year. Other non-electronics NODX that shrank included petrochemicals and primary chemicals.

The U.S.-China trade and tech war has evidently impacted Singapore’s NODX. Electronics NODX dropped 16.4 percent year-on-year, the 10th double-digit year-on-year contraction in the last 11 months with the exception of February 2019. Still, on absolute terms, electronics NODX had possibly reached bottom around June 2019 and is showing some tentative signs of stabilization.

NODX to major markets also dropped in October, with the exception of Taiwan. Key NODX markets that slumped included Japan, the EU and the U.S.

This implies a lacklustre beginning to the fourth quarter 2019 growth momentum, even if there might be a bump higher in NODX for the two remaining months of the year due to a less challenging base last year.

“We anticipate that the NODX growth contraction could ease to -5.5 percent yoy in November and possibly revert to marginal but positive growth of 3.1 percent yoy in December to bring full-year 2019 NODX growth to -9.1 percent yoy”, added OCBC Bank.