Singapore: Non-oil exports post third consecutive double-digit contraction in May
June 17, 2019
Non-oil domestic exports (NODX) declined 15.9% year-on-year in May, significantly sharper than April’s 10.0% drop but slightly less than market analysts’ expectations of a 16.5% contraction. On a month-on-month seasonally-adjusted basis, NODX increased by 6.2% in May, contrasting April’s 0.7% decline.
May’s result was caused by a 31.4% decrease in electronic NODX, markedly worse than April’s 16.3% drop. Meanwhile, non-electronic NODX dipped 10.8% in May, compared to the 8.0% decline registered in April. The contraction in non-electronic NODX was largely driven by fewer exports of civil engineering equipment parts, non-monetary gold and petrochemicals, with lower demand from China, Taiwan and Hong Kong contributing the most to the decline.
May’s NODX data suggests the synchronized slowdown in global demand for technology and the U.S.-China trade war continue to weigh on demand for Singaporean goods. While the possible next round of tariff hikes may well have sparked a temporary recovery in demand for Singapore’s NODX in June, as China front-loaded exports to the U.S, export momentum is expected to be weak in the subsequent months. The gloomier trade figures coupled with tepid inflationary pressures could lead the MAS to mull over a more expansionary monetary policy stance at the next meeting in October this year.
Author: Steven Burke, Economist