Singaporean NODX growth shrinks again in September Q4 2019 GDP growth to remain weak

Singaporean NODX growth shrank for the seventh straight month in September. On a year-on-year basis, the NODX growth contracted 8.1 percent, as compared with expectations of a contraction of 7.2 percent. Sequentially, the growth shrank 3.3 percent, as compared with the expectations of a contraction of 5 percent.

In spite of the widespread softness in both electronics and non-electronics exports, this was a milder contraction compared to the August print of -9 percent year-on-year. Nevertheless, with the exception of February when NODX grew 4.8 percent year-on-year, the remainder of the year has been stalled by soft NODX performance because of the sluggish global demand and trade war tensions.

Electronics exports dropped again, falling 24.8 percent year-on-year, the 10th consecutive fall. This implies that the sector has not yet bottomed, noted Selena Ling, Head of Treasury Research & Strategy, OCBC Bank. ICs, PCs and disk media mainly weighed on the print. Markedly, electronic export growth to the top 10 NODX markets all contracted by double-digits in September with the exception of Indonesia and South Korea.

Non-electronics exports recorded a mild contraction of 2.3 percent year-on-year in September. The non-electronics export performance was dragged by pharmaceuticals, petrochemicals and jewellery. Nevertheless, the non-electronics exports to North Asia outperformed the remainder of the top 10 NODX markets.

Singapore continues to be a bellwether for global trade. With year-to-date NODX growth contraction already averaging close to 10 percent year-on-year, the full-year 2019 NODX growth might potentially mark the worst NODX contraction since 2009 post-GFC.

“Our view remains that 4Q19 GDP growth is likely to remain anaemic and full-year 2019 growth may still come in at the lower end of the official 0-1% growth forecast. Note PM Lee has also warned that Singapore economy would be lucky if GDP growth is positive this year due to the pall from the US-China trade disputes”, added Selena Ling.