SINGAPORE: Singapore’s key non-oil exports (NODX) fell a surprisingly sharp 8.8 per cent in November from a year ago due to a drop in shipments of both electronic and non-electronic products.
The November drop in exports of goods made in Singapore compared with a 2.8 per cent growth in October, trade promotion agency International Enterprise (IE) Singapore said on Tuesday.
Economists had expected November exports to expand 4.2 per cent on-year.
Non-oil domestic exports to all top 10 NODX markets, except China, US and Taiwan, fell in November.
The top three contributors to the NODX contraction in November were the European Union, Hong Kong and South Korea.
Shipments to the European Union fell 26.6 per cent on-year in November, compared with a 12.3 per cent decline the previous month.
Exports to the US rose 10.3 per cent on-year after falling 15.5 per cent in October. Exports to China, the biggest buyer of goods made in Singapore, grew 16.2 per cent — somewhat slower than the previous month’s 21.8 per cent increase.
Electronic exports dropped 8.9 per cent on-year following a 1.4 per cent decline in October, while non-electronic shipments fell 8.8 per cent compared with a 4.9 percent growth the previous month.
Economists had been optimistic about electronics exports after the recovery in October. However, they now said that it was likely to be a blip due to Christmas orders.
In addition, they warned that the strong inventory build-up in the electronics segment could also weigh on manufacturing expansion next year.
Joey Chew, an economist with Barclays, said: “I would say the October rebound was a blip and November just went back to the status quo of weaker exports for Singapore. I think a lot of it is structural.
“There are some very strong structural drags from restructuring, from the change in industry mix for electronics — for example moving from production based to more RD, design and testing type of activities. These kinds of structural drags are outweighing some of the cyclical benefits that Singapore ought to be receiving from an improving global economy.”
In the non-electronics sector, pharmaceutical exports tumbled 46.9 per cent after falling 27.3 per cent in the previous month.
Exports of pharmaceutical products are typically volatile, but CIMB said November’s exports — valued at S$934.5 million — was the lowest monthly export for the pharmaceuticals segment in five years.
On a month-on-month basis, exports fell 9.3 per cent on-month in seasonally adjusted terms after expanding 3.2 per cent on-month in October.
Song Seng Wun, CIMB’s regional economist, said: “This is a reminder that while the recovery in external demand is still intact, it is a not a straight line recovery.
“Nonetheless, we believe the gradually improving external demand picture, today’s numbers notwithstanding, still underpin the recovery — perhaps 4 to 5 per cent growth in NODX for 2014, after 4 to 5 per cent decline this year — to underpin Singapore’s modest growth expectation for 2014.”
The government expects next year’s growth to come in at between two and four per cent.
Economists said there are some key risks in 2014. They include the uneven growth in Europe, the tapering of stimulus measures in the US and potential geo-political tension here in Asia.
The external environment aside, economists expect Singapore to face more challenges domestically, such as inflation concerns, the labour crunch and issues relating to the restructuring of the economy.
Singapore"s NODX drop surprisingly sharp 8.8% in November
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