Singapore August NODX better than market expectations; likely to moderate through rest of 2018: OCBC Bank

Singapore’s non-oil domestic exports (NODX) came in better than market expectations during the month of August at 5.0 percent y/y (0.4 percent m/m sa), albeit witnessing a significant slowdown from July’s revised 11.0 percent y/y (3.6 percent m/m sa); however, August 2017 was a relatively high base at 16.7 percent y/y.

For the year-to-date 2018, NODX growth was a relatively resilient 6.1 percent y/y, largely driven by non-electronics exports (12.4 percent y/y) followed by electronics exports (5.9 percent y/y). The main drag was a persistent electronics export contraction (August: 1.5 percent y/y and -5.9 percent y/y YTD).

Electronics exports have fallen for 9 consecutive months since December 2017. Although the August print of -1.5 percent y/y is more modest than July’s -5.8 percent y/y, it may be premature to call a clear bottom to the electronics weakness as demand for ICs, PC parts, diodes & transistors remain soft and growth in PCs and disk media products have been insufficient to compensate thus far.

"We tip NODX growth for the remainder of the year to continue to moderate from here, partly due to the high base in 2017 (9.2 percent y/y) as well as potential downside risks posed by the escalating US-China trade tensions and its adverse implications for business and consumer confidence in a prolonged trade war," OCBC Bank commented in its latest research report.