Business

Non-oil exports disappoint with 12.3% decline

Non-oil domestic exports in negative territory for eighth straight month

Singapore's extended slowdown continues, with non-oil domestic exports (Nodx) remaining mired in negative territory for an eighth consecutive month in October.

Analysts are looking to a slow recovery boosted by smartphone demand - but clouded by sluggish prospects in the coming year. Major markets like China are expected to continue decelerating, and most Asean markets are likely to see stabilisation rather than a sharp pick-up according to International Monetary Fund projections.

Singapore also expects lacklustre growth next year.

Latest Nodx figures showed shipments sank 12.3 per cent last month, from an 8.1 per cent drop in September. The setback came after three months of less steep falls.

Even an interim trade deal between the US and China may not turn things around.

OCBC Bank's head of treasury research and strategy Selena Ling noted that people have become quite immune to ups and downs in negotiations, with hopes of the Phase 1 signing being "discounted".

The Nodx drop last month was larger than an expected 10 per cent fall from a year ago, according to a Bloomberg poll, and the lowest since June's 17.4 per cent decline.

In particular, shipments of non-electronic products fell 11 per cent from a year ago, down from a 2.3 per cent dip in September.

The biggest contributors were pharmaceuticals, petrochemicals and primary chemicals.

Although Enterprise Singapore said the overall drop was mainly due to the high base of comparison a year ago in non-electronics, Barclays economist Brian Tan noted the larger decline suggests the economy is still not picking up strongly.

Electronic shipments continued their double-digit fall, slipping 16.4 per cent but improving from a 24.8 per cent contraction the month before.

Ms Ling, however, said "on absolute terms, electronics Nodx had likely hit bottom around June this year and is showing some tentative signs of stabilisation".

Maybank Kim Eng economists Chua Hak Bin and Lee Ju Ye added that the electronics downcycle is likely past its worst, with a sluggish recovery under way.

"This will be led by improving smartphone demand which saw global sales recover in the third quarter."

Economists expect stabilisation rather than a strong recovery in growth ahead.

BUSINESS & FINANCE