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Singapore NODX down 6.6% on-year in May, missing forecast

Non-oil domestic exports (NODX) in Singapore contracted 6.6 per cent on-year in May, defying economist forecasts, according to International Enterprise (IE) Singapore data.

SINGAPORE: Non-oil domestic exports (NODX) in Singapore contracted 6.6 per cent on-year in May, due to a decrease in both electronic and non-electronic NODX, International Enterprise (IE) Singapore said on Tuesday (June 17).

The fall in NODX comes after a 0.9 per cent on-year increase in April. The median estimate of economists polled by Reuters was for a similar expansion of 0.9 per cent in May.

On a month-on-month seasonally adjusted basis, NODX declined by 7.5 per cent in May, compared to the previous month’s 9 per cent increase.

Leong Wai Ho, director of research at Barclays Bank, said: "When we dug deeper into that story on electronics, we found that there were fewer working days this May compared to last May. There was half-a-day fewer working days in Singapore, as many as two less working days in Korea and one-and-a-half less working days in Taiwan so that obviously weighed on the year-on-year comparisons."

Electronic NODX contracted by 15.3 per cent on-year in May, following an 8.7 per cent decline in the previous month. The contraction in May was largely due to sharp declines in integrated circuits (IC) (-16.2 per cent), parts of PCs (-18.6 per cent) and consumer electronics (-57.8 per cent), IE Singapore said.

Looking ahead, analysts said there could be a pick-up in the near term due to the World Cup.

Football fever may give a boost to demand for electronics as fans clamour for consumer products to watch the 2014 World Cup matches and that can possibly give the electronics cluster a much needed lift.

Non-electronic NODX decreased by 2.4 per cent on-year in May, in contrast to the 5.5 per cent expansion in the previous month. The decline was led by pharmaceuticals (-26.3 per cent), specialised machinery (-13.1 per cent) and aircraft parts (-30.2 per cent).

Saktiandi Supaat, head of foreign exchange research at Maybank, explained: "You might see a slight recovery in June probably as a result of the eurozone demand. I think the eurozone has been a strong demand for pharmaceutical products. The petrochemical side might also see a slight improvement partly because of an increase in oil prices in June. That might actually ramp up a bit in terms of the price effects."

It would also signify a turnaround since the European Union was a key drag in May, along with Hong Kong and Thailand.

Exports to all of Singapore's top 10 NODX markets, except China, Malaysia and Indonesia, contracted in May, IE Singapore said. The top three contributors to the decline were the European Union (-22.6 per cent), Hong Kong (-28.6 per cent) and Thailand (-29 per cent).\

Despite the latest numbers, economists say, that for 2014 as a whole, non-oil domestic exports are still expected to more than meet the official one to three per cent growth forecast.


NON-OIL RE-EXPORTS (NORX)

Non-oil re-exports (NORX) decreased by 4.7 per cent on-year in May, after a 6.6 per cent growth in the previous month, due to a decline in non-electronic NORX which outweighed the rise in electronic NORX, IE Singapore said.

Electronic NORX increased by 1.9 per cent on-year in May, mainly due to diodes and transistors (+46.6 per cent), ICs (+2.6 per cent) and consumer electronics (+7.6 per cent), the trade agency said.

Non-electronic NORX declined by 10.9 per cent on-year last month, due to structures of ships and boats (-98.6 per cent), optical goods (-48.6 per cent) and piston engines (-20.6 per cent).

Re-exports to all of Singapore’s top 10 NORX markets, except Hong Kong, China, Taiwan, Malaysia and the European Union, decreased in May. The top three contributors to the decline were Indonesia (-15.8 per cent), the United States (-8.9 per cent) and South Korea (-7.4 per cent).

OIL DOMESTIC EXPORTS

Oil domestic exports expanded by 22.7 per cent on-year in May, after the preceding month’s 11.5 per cent increase, IE Singapore said. The growth was largely due to higher sales to Malaysia (+41.6 per cent), Indonesia (+55.3 per cent) and Australia (+35.2 per cent).

On a month-on-month seasonally adjusted basis, oil domestic exports expanded by 6 per cent in May, following a rise of 3 per cent in the previous month.

TOTAL TRADE

Total trade expanded by 0.4 per cent on-year in May, following a 5.7 per cent increase in the previous month. Total exports for the month decreased by 1.2 per cent, while total imports increased by 2.1 per cent.

On a month-on-month seasonally adjusted basis, total trade contracted by 4 per cent in May, after a 0.7 per cent increase in the preceding month. On a seasonally adjusted basis, the level of total trade reached S$84 billion in May, lower than the previous month’s S$87.5 billion.


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