Exports may shrink anew in November as economy outlook dims: analyst

It contracted by 5.6% in October 2022 due to decline in electronics shipments.

Amidst low shipments to China and dimmer economy outlook, an analyst said the non-oil domestic exports (NODX) could be worse than expected and may even contract further in November.

CGS-CIMB’s brokerage report showed that the NODX will remain in contraction in November but it maintains its 2023 economy outlook at 2% year-on-year.

In fact, CGS-CIMB said the decrease in NODX in October was much lower than its forecast.

“NODX growth YoY came in at a decline of 5.6% YoY in October, compared to the 3.1% growth recorded in September 2022,” it said.

The decline was on the back of contraction in ICs, disk media products, and computer parts.

Strict lockdowns

When China continued to impose strict border regulations, exports to the top 10 markets in October declined. The contraction in shipment of China was at 32%, European Union at 19.5%, and Malaysia at 16.1%.

Cooling measures in China’s property sector also added to weakened appetite for consumption.

The European Union is also hit by rising energy prices.

“We see Singapore’s NODX growth likely to remain in contraction in Nov amid a dimmer outlook for the global economy. More lockdowns in China amid a rise in infections could spell further demand dampening ahead, although so far the government has eased some of the quarantine rules,” said CGS-CIMB.