Despite a Bloomberg poll of economists forecasting 2 per cent growth in December, after a 2.8 per cent drop in November, non-oil domestic exports (Nodx) ended 2018 on a negative note, Enterprise Singapore figures released on Thursday (Jan 17) show.

Similar to the situation in November, the high base of comparison year on year, given high export numbers in the same period last year, had a part to play.

Economists told The Straits Times that looking ahead, the broad trend appears to be moving downwards, although it is unclear how deep the slide may be.

DBS senior economist Irvin Seah said: “What is most disconcerting is the 5.7 per cent month-on-month decline (in Nodx).” 

“We already had two months of month-on-month dips and if such a trend continues, this points to a dimmer outlook for overall manufacturing as well as the Singapore economy, heading into 2019,” he added.

On a month-on-month seasonally adjusted basis, Nodx dropped 5.7 per cent, following November’s 4.3 per cent decline. 

But Mr Seah highlighted that in November and December, when falls in export growth were seen, the “downside risk from trade tensions between the United States and China was deepest”. 

“Many importers may have held back their orders while waiting for more clarity on the trade war”, he said.

Asked about the discrepancy between analyst predictions and official figures, he added that consensus numbers have already been adjusted down, although there have been “mixed signals” that in part come from companies they speak to.

“Some say they are benefiting (from the trade tensions), but others say they see an impact on their orders. The numbers need to be watched very closely,” he said.

Although Singapore's electronics exports finally saw growth of 4.3 per cent in November, they reversed course and contracted by 11.2 per cent in December. The biggest contributors to this slide were falls in shipments of personal computers, disk media products and diodes and transistors.

Non-electronic Nodx went down as well, by 7.4 per cent, accelerating from the 5.4 per cent drop in the month before. Contributing the most to this were drops in shipments of specialised machinery, pharmaceuticals and primary chemicals.

On a seasonally adjusted basis, the level of Nodx reached $14 billion in December as well, lower than $14.9 billion in the previous month.

Suggesting there is “almost no silver lining” in last month’s figures, ING chief economist Robert Carnell said: “All of the components are heavily down. Pharmaceuticals are particularly weak.”

“Having been quite strong earlier last year, pharma has moved from the thing that was holding everything up to being one of the other factors dragging Nodx down,” he added.

But he believes it is hard to pin the general downtrend on fallout from the trade war, noting that exports to Singapore’s biggest markets in Asia were down across the board except those to China.

Exports to most of Singapore’s top 10 markets declined in December, except those to the United States and China, led by drops in shipments to Europe, South Korea and Malaysia.

On the electronics front, Mr Carnell added: “A global lack of demand for new smartphone devices has weighed on the semiconductor and electronics sector. Until 5G becomes established, that’s likely to remain a soft spot.”

UOB economist Barnabas Gan noted that exports of pharmaceuticals "unexpectedly fell... bucking its eight consecutive months of expansion and marking its lowest growth print since February 2018."

Meanwhile, seasonally adjusted non-oil retained imports of intermediate goods rose by $0.1 billion – from $6.4 billion in the previous month to $6.5 billion.

Total trade increased by 1.6 per cent as well, after 7.4 per cent growth in November, due to a 6.1 per cent rise in total imports. Total exports declined 2.5 per cent.

Oil domestic exports dropped by 11.1 per cent in December, also compared to last year, after an 18.9 per cent expansion in the previous month. This was mainly due to lower sales to Malaysia, China and Indonesia.

https://www.straitstimes.com/business/economy/drop-in-singapore-non-oil-...