Singapore NODX surged 15.5% in May

Non-electronics jumped 26.2% and offset the 7.8% decline in electronics.

Singapore’s non-oil domestic exports jumped 15.5% in May 2018, extending the 11.8% growth last month, thanks to the growth in non-electronic NODX which outweighed the decline in electronics, Enterprise Singapore (ESG) revealed.

According to an announcement, non-oil retained imports of intermediate goods (NORI) declined from $6.5b in the previous month to S$5.8b in May 2018 on a seasonally adjusted (SA) basis.

Total trade grew 9.8%, extending the 10.6% growth last month. Total exports rose by 10.1% in May 2018, similar to the growth in April 2018 (10.1%). Total imports grew by 9.6%, after the 11.2% expansion in April 2018. On an SA basis, total trade hit $90.5b.

Electronic NODX fell 7.8% due to declines in integrated circuits (8.5%), parts of personal computers (37.5%), and diodes (19%). Non-electronic NODX jumped 26.2% thanks to surges in civil engineering equipment parts, food preparations (+132.7%), and pharmaceuticals (+32.1%).

NODX to the top 10 markets rose, but shipments to South Korea, China, Malaysia, Taiwan, and Thailand decreased. The largest contributors to the NODX growth were the EU 28 (+97.5%), the US (+54%), and Japan (+14.8%).

Oil domestic exports jumped 17.8% thanks to increases in Indonesia (+40.8%), Australia (+90.1%) and Malaysia (+25.2%).

NORX rose by 4.0% in May 2018, after the 8.2% increase in April 2018, due to the growth in both electronic (+1.1%) and non-electronic (+6.8%) re-exports.

JP Morgan economist Benjamin Shatil commented, “The turn-up in tech exports follows several months of weak performance, but aligns with the recent trend in cyclical data from the other regional tech exporters. The bulk of the rise reflected an increase in semiconductor exports.”

There were also firm rises in other export products, with volatile pharma exports up a solid 7.8% MoM SA, he added.

“The increase in pharma looks to be one factor behind an unusually strong increase in EU-bound exports,” Shatil said. He added, citing ESG, that civil engineering equipment parts also contributed to the rise, suggesting a one-off surge rather than a turn in the underlying demand profile.

“That said, we continue to expect an upturn in overall export momentum through mid-year, premised on the forecast of a recovery in DM capex – particularly in the US – toward trend-like growth into 2H2018,” he said. 

UOB senior economist Alvin Liew is still hesitant to raise 2018 NODX forecasts despite a "stellar" performance in May due to some reasons such as the volatility of pharma exports.

"Part the May’s NODX outperformance was due to a 2-month surge in pharmaceutical exports which has a notoriously volatile history, whilst the other sobering factor is the continued decline in electronics NODX which is seeing high base effects already started to kick in materially," he said.

Escalating US-China trade tensions (and US trade tensions with the rest of the world) are also clouding the outlook for a very trade-dependent Singapore, he added.

"The very strong export growth rates in April and May are unlikely to be sustained into the second half of 2018. Thus, we maintain our forecast for 2018 NODX to expand at a slower pace of 6.5%, compared to the 8.8% in 2017," he concluded.