All the way down: Electronics exports fall for the 25th consecutive month in August

The 6.9% slide was worse than consensus estimates.

The country’s non-oil domestic exports (NODX) registered a strong headline number in August, clocking in a 6% year-on-year growth that bucked a three-month decline streak.

However, analysts note that that the strength was narrowly concentrated in the volatile pharmaceutical and chemical sectors, while electronics exports, the economy’s old stalwart, continued to remain weak.

According to UOB Kay Hian, “However, electronics exports continued to decline for the 25th consecutive month and fell 6.9% y/y in August, slightly worse than consensus estimates of a 6.4% y/y decline. Again, PC-related exports remained weak as parts of PCs fell 17.3% y/y, while disk drives contracted 22.5% y/y. ICs exports also fell 4.2% y/y in the same month.”

Here’s more from the report:

The August expansion was a temporary reprieve from the past three consecutive months of decline that was due to poor performance in both electronic and non-electronic exports. On a seasonally-adjusted m/m basis, NODX rose 7.6%, following the 2.5% increase in July.

The increase in non-electronic NODX outweighed electronic NODX in August. Non-Electronic exports rose 12.1% y/y, compared to the 1.1% y/y contraction in July, as segments like petrochemicals (+39.9% y/y), pharmaceuticals (+26.9% y/y), and structures of ships & boats (+1,337.8% y/y) contributed with strong on-year growth.

Singapore’s NODX remained weak so far this year. In the first eight months, NODX declined 1.4% y/y as the 3.5% y/y gain in non-electronic exports failed to negate the weakness in electronic exports (-11.8% y/y).

With electronic exports contracting for a sustained 25-month period, electronic exports had been playing a smaller part in Singapore’s NODX.

For example, the share of electronic NODX in overall NODX had declined to 28.6% this year. This compared to the 66% and 41% share during 2000 and 2010 respectively.

After today’s release, we still maintain our 2014 NODX growth forecast of -1.0% as risks of poor performance of electronic NODX dragging overall NODX growth continues. Singapore’s trade agency also maintains their forecast for Singapore’s 2014 NODX growth to between -2.0% and -1.0%. Our -1% contraction for NODX in 2014 implies that overall NODX growth for September until the end of this year will come in flattish (-0.2% y/y).

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