S’pore’s 2019 exports could be headed for worst showing since global financial crisis: Economists
Singapore exports have taken a hit this year as the global economy slows amid a damaging trade war between the United States and China.
SINGAPORE — Some economists fear that Singapore’s exports in 2019 could turn in their worst performance since the global financial crisis a decade ago, with the release on Thursday (Oct 17) of another weak set of figures for September.
Non-oil domestic exports (Nodx), the main measure of shipments, shrank 8.1 per cent in September from a year earlier, the seventh straight month of decline as electronics exports in particular again suffered horror falls.
The poor showing comes amid a slowing global economy, which has been battered by the continuing trade war between the United States and China.
Commenting to TODAY on the data from trade agency Enterprise Singapore, economists said Nodx have now slumped 10.3 per cent for the first nine months of the year.
WORST PERFORMANCE SINCE 2009?
Some economists expect Nodx to shrink about 10 per cent in 2019
Nodx contracted 10.5 per cent in 2009, during the global financial crisis.
The economists’ 2019 estimates are bleaker than Enterprise Singapore’s own forecast, which anticipates a contraction of between 8 and 9 per cent.
Despite the gloomy trade figures, economists’ projections for Singapore's full-year economic growth remain unchanged, with several expecting the figure to come in at the lower end of the official forecast range of between 0 and 1 per cent.
The reason September’s export figures did not cause the economists to revise their economic growth forecasts for 2019 was that Nodx fell short of their expectations only by a slight margin.
Some economists are expecting a boost in the fourth quarter trade figures due to:
“Base effects” as Nodx did not perform well in the fourth quarter of 2018, declining by 1.1 per cent, compared with growth of 8 per cent in the third quarter of that year. That means fourth quarter of 2019 figures may compare favourably even if they are fairly weak
CIMB economist Song Seng Wun said it is “not impossible” for the fourth quarter to narrow its decline to about 5 per cent, which is required for full-year data to fall within the official forecast range
SIGNS OF STABILISATION?
While Nodx have fallen for the seventh straight month, economists noted that the pace of the contraction is slightly slower.
September exports: -8.1 per cent
August exports: -9 per cent
Economists say:
Dr Chua Hak Bin and Ms Lee Ju Ye from Maybank: Nodx have likely bottomed in the second quarter and third quarter of 2019
Mr Irvin Seah from DBS Bank: Signs of stabilisation are emerging
However, they also say that:
Mr Song: September’s data is “nothing to shout about”
Mr Seah: Recovery will remain weak and the sluggish trade environment will continue for the next two months at least
ELECTRONICS EXPORTS HIT HARD
Exports of electronics slumped 24.8 per cent in September from a year earlier, after a 25.9 per cent nosedive in August. Integrated circuits and personal computers were the worst hit.
Nodx to all Singapore’s main markets went downhill in September except for mainland China and Taiwan, which grew 20.8 per cent and 2.3 per cent respectively.
