SINGAPORE (Sept 17): Singapore’s non-oil domestic exports (NODX) for Aug 2018 grew 5% y-o-y, moderating from the 11% expansion in the previous month due to a decline in electronics, which fell 1.5% following the 5.8% decrease in the previous month.

Diodes & transistors, parts of PCs and ICs fell by 28.8%, 47.8% and 1% respectively, contributing to the bulk of the decrease in electronic domestic exports.

This was nonetheless outweighed by non-electronic NODX growth in the month under review, notes trade promotion agency Enterprise Singapore on Monday, with pharmaceuticals (+33.4%), food preparations (+82.8%) and measuring instruments (+22.2%) contributing the most to non-electronic NODX growth.

On a m-o-m seasonally adjusted (SA) basis, NODX rose by 0.4% in Aug after the previous month’s 3.6% growth. The increase was mainly due to higher electronic NODX which offset the decrease in non-electronics.

On a SA basis, the level of NODX reached $15.6 billion in Aug 2018, similar to the previous month.

Non-oil retained imports of intermediate goods (NORI) declined on a SA basis by $1.1 billion in Aug this year from $6.5 billion in the previous month. At $5.4 billion, this was higher y-o-y compared to $4.6 billion in Aug 2017, though Enterprise Singapore notes that the latest figure comes in slightly below the 2017 average of $5.7 billion.

Total trade rose 13.3% on a y-o-y basis in Aug following the 17.4% growth in the preceding month, supported by both export and import growth of 13.5% and 13.2%, respectively.

On a m-o-m SA basis, total trade fell by 0.2% after the 3.9% growth in July 2018.

Non-oil re-exports (NORX) rose by 14.1% in Aug 2018 following a 8.4% increase the month before, due to growth in both electronic and non-electronic NORX.

Among the top 10 markets, the top three contributors to NORX growth were Indonesia, the EU 28, and Hong Kong at +41.6%, +20.3% and +7.5%, respectively.

Looking ahead, Maybank Kim Eng analyst Chua Hak Bin says trade numbers will continue to be distorted in 3Q as continues stock up in anticipation of higher US and China tariffs.

Based on the latest data from Enterprise Singapore, he believes Singapore’s exports appear to be holding up with no visible impact from the ongoing US-China trade war as of yet. He nonetheless sees downside risks as trade tensions continue to escalate.

“Trump looks ready to hit China with tariffs on another US$200bn of Chinese imports. He is threatening to raise the stakes to the remaining $267bn of Chinese imports. Impact on trade and growth will likely be more visible later in the year. Trade diversion may help to partly cushion the negative impact from disruptions to global trade,” says Chua in a Monday report.  

The research house is maintaining its GDP forecast for Singapore at +3.5% for 2018 and +2.7% for 2019, with expectations for the Monetary Authority of Singapore (MAS) to maintain its current “slight appreciation bias” at the Oct policy meeting.