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SINGAPORE: In another sign of a slowing Singapore economy, non-oil domestic exports (NODX) continued to shrink in July.
Trade promotion agency International Enterprise Singapore said NODX fell by 5.7 per cent from a year earlier to S$13.67 billion in July, following an 11 per cent decrease in June.
The decline, which was bigger than market expectations, was due mainly to the continued fall in electronics exports to the US and Europe. The two regions are among Singapore's largest export markets.
Exports to the US, which is Singapore's largest export market, fell 33 per cent on-year, extending a 24 per cent decline in June.
Overall, exports to Singapore's top 10 markets were weaker, except for those to Indonesia, China, South Korea and Hong Kong, which grew.
On a seasonally adjusted basis, non-oil domestic exports fell 2.2 per cent on-month in July, compared with the 4.2 per cent increase in June.
Electronics continued to drag the trade numbers, with exports down 14.2 per cent on year.
For the near term, the outlook is bearish if the increasing gap between electronics production and exports is anything to go by.
HSBC's economist, A Prakriti Sofat, said: "Historically, there has been a close correlation between actual production in electronics sector and exports of electronics.
"Recently, we noticed that this gap has been widening, which then means either domestic consumption of electronics is high because it's not being exported, but retail sales do not support that. This means inventories are being built up."
That, analysts said, could put pressure on industrial production.
The pharmaceuticals sector also contributed to July's weak showing. But economists are less worried, saying the weakness is due mainly to production cycles rather than a drop in demand.
Going forward, analysts said retreating oil prices may provide a much needed respite.
David Cohen, director of Asian economic forecasting at Action Economics, said: "With oil prices easing a little bit, maybe global demand doesn't have to continue slowing so steeply. After all, it was high oil prices, as we realize here in Singapore, that put a pinch on household budgets and corporate bottom lines."
Meanwhile, non-oil re-exports rose 3.9 per cent in July, higher than the 2.4 per cent increase recorded in June because of increases in both electronic and non-electronic exports.
Singapore's total trade rose 21 per cent in July to S$88.3 billion, stronger than the 14 per cent expansion in June.
Singapore recently revised downwards its forecast for this year's exports, from a 2 to 4 per cent growth to a 2 to 4 per cent contraction. This would be Singapore's first decline since 2001.
Exports numbers are closely watched because they account for some 70 per cent of Singapore's trade-dependent economy.
- CNA/vm/ir
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