Singapore’s NODX falls sharply in March, near-term export outlook remains wary

Singapore’s exports continue to post disappointing result, increasing downside risks to the domestic economic growth. The NODX fell sharply by nearly 16% y/y in March 2016. The drop was worsened by a high base of comparison in 2015. Subtracting the base effect, the NODX rose slightly 0.2% on a monthly seasonally adjusted basis.

This shows that the nation has not gained from the recent small rebound in Asia’s tech sector, according to ANZ. The probability of central bank easing in October will rise if the present trend continues, noted ANZ.

March’s NODX data shows that the recent manufacturing PMI recovery of Singapore is a ‘false dawn’ instead of ‘green shoots’ of a growing improvement, added ANZ. Singapore’s manufacturing activity has showed certain signs of bottoming out, with regional manufacturing PMIs rebounding slightly last month.

However, a complete rebound is not expected to happen in near future as new export orders and new orders continue to shrink, although at a slower rate, noted ANZ. Therefore, the near-term outlook for export and manufacturing continues to be wary, added ANZ.

The NODX, on a three-month moving average yearly basis continued to fall 9%, as compared with February’s fall of 5.6%. NODX, meanwhile, rose 0.2% on a monthly seasonally adjusted basis in March, after shrinking 4.2% in the previous month.

Non-electronic and electronic NODX dropped 18% y/y and 9.1% y/y, respectively. Non-electronic domestic exports shrank mainly because of declines in petrochemicals, pharmaceuticals and structures of ships and boats. Meanwhile, electronic domestic exports shrank mainly due to declines in PCs, ICs and parts of PCs.