Singapore’s September NODX unexpectedly accelerates; full-year NODX growth seen at 5 pct: OCBC Bank

Singapore’s non-oil domestic exports (NODX) unexpectedly accelerated to 8.3 percent y/y (-4.3 percent m/m sa) during the month of September, which beat market expectations and compared to the 5.0 percent y/y (+0.4 percent m/m sa) print in August.

For the first nine months of 2018, NODX rose 6.2 percent y/y, which suggests that even with an expected NODX growth moderation for the remaining months of 2018, the full-year NODX growth forecast of 5 percent remains intact for now, according to the latest research report from OCBC Bank.

Notably, electronics exports fell for the 10th straight month by 0.9 percent, dragged down by PCs, diodes & transistors and parts of ICs. However, the pace of the decline appears to be slowing – the worst was -12.7 percent y/y in February this year, but has since slowed to -1.5 percent in August and now -0.9 percent y/y in September.  

The bright spot was non-electronics exports which rose 11.9 percent y/y (faster than August’s 7.8 percent y/y), led by pharmaceuticals (+67.5 percent y/y), non-monetary gold (+23.7 percent) and food preparations (+33.9 percent). The non-electronics exports also performed well for the NODX markets like US, EU and Thailand which saw higher NODX growth. 

NODX performance to the top 10 markets remain bifurcated - only 4 of the top 10 NODX markets rose, led by Thailand (+46.8 percent) US (+41.5 percent y/y), EU18 (+21.6 percent) and Indonesia (+16.2 percent y/y), whereas NODX to China underperformed at -17.8 percent y/y which reinforces China’s growth slowdown theme as well as the effects of the escalating US-China trade war.

Meanwhile, this trend may persist in the near-term while awaiting the outcomes of the US Treasury Department’s semi-annual report on currency manipulators, the G20 meeting between US president Trump and Chinese president Xi Jin Ping in late November and the US mid-term elections.