Singapore exports likely to remain tepid in near-term on weakness in global business conditions

Exports in Singapore are expected to remain tepid in the near-term, following weakness in global business conditions. There are still pockets of risk in the horizon pertaining to key markets such as China, the US and the Eurozone.

Headline non-oil domestic exports for October shrunk by a whopping 12.0 percent y/y in the month.  Sequentially, sales fell by 3.7 percent m/m on a seasonally adjusted basis, reversing a 2.2 percent rise in the previous month.

Further, exports of pharmaceutical products plunged by 47 percent y/y in the month. In addition, the decline in electronics exports (-6.6 percent y/y) despite improvements in electronics production output and PMI also suggest that near-term outlook doesn’t seem that bright after all.

Indeed, inventory stock, falling electronics component prices, currency fluctuations and base effect could have caused the discrepancies between sales and production output. Perhaps better electronics output for the month will ease some concern.

"Signs of improvement are tentative at present and it doesn’t help when there will be substantial seasonal factors masking any clue of a turnaround particularly at the tail end of every year and right through the beginning the following year," DBS commented in its latest research report.