SINGAPORE (June 25): Singapore’s trade numbers have been improving steadily. In 1Q2018, non-oil domestic exports increased 1.9% y-o-y. For April and May, they were up 11.8% and 15.5% respectively. Electronics exports, however, are on the decline. In 1Q2018, they fell 7.9% on the back of reduced demand for integrated circuits, personal computer parts, diodes and transistors. In April, electronics NODX declined 6.9%; in May, they were down 7.8%.

“The [Purchasing Managers’ Indexes’ in] key markets are trending lower and there is a dire lack of new IT product launches to spur consumer demand,” says Irvin Seah, economist at DBS Bank. Unless companies around the world start increasing their capital expenditure on equipment, Seah says, the lower electronics exports could begin to drag on total trade data.

Could the weakness in electronics exports be a forerunner of tougher times for the locally listed electronics manufacturers? Over the past 12 months, stocks of companies such as AEM Holdings and Venture Corp have done well on the back of strong revenue growth. AEM has gained 74.5%; Venture is up 49.7%.

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