The non-oil domestic of exports of Singapore have slumped yet again in May, decreasing by 1.2% compared to a year ago. According to the International Enterprise (IE) Singapore, this came after the 0.8% decline seen in the previous month.
Once again, non-electronic exports saw a sharper drop in the said month, continuing its 2.9% decline in April to 9% this month. the main drags are civil engineering equipment parts, nonmonetary gold and pharmaceuticals which decreased by 92.5%, 24.6%, and 14.2%, respectively.
The decline in non-electronic products offset the significant gains in electronic exports, which realised a 23.3% growth following its 4.8% increase in the previous month. ICs, PCs and parts of PCs grew by 31.2%, 64.7% and 26.2% respectively, and they contributed the most to the growth in electronic domestic exports.
Analysts at UOB said the two consecutive months of contraction in Singapore NODX have alarmed market watchers since it was growing at an average growth of 14% over the 5 months prior.
"However, we think that this is only a temporary, especially since May 2016 was a high base month. NODX growth rates are notoriously volatile and a single month of technical pullback should not veer us off course in our longer term view of the recovery in global trade for 2017," the analysts noted.
Meanwhile, NODX to the top 10 markets expanded in May with the exception of Hong Kong. The largest contributors to the increase in exports were China, South Korea, and the EU 28, where exports grew by 36.4%, 64.3%, and 16.2%, respectively.
Overall, total trade rose by 14.3% in May, extending the growth in the preceding months. Total exports expanded by 11.4% while imports jumped 17.6%.
UOB analysts expect overall NODX this year to fare better, supported by the continued expansion in the electronics sector.
"That said, we do not expect the strong double-digit NODX growth since November 2016 can be sustained into the second half of 2017. This is especially since the current electronics cycle may be coming towards an end with the rolling out of the next wave of smartphones likely in 2H 2017," they noted.