Singapore’s export data for February likely to disappoint

Singaporean economy faces a grim outlook on the data front. The exports data for February, which will be released tomorrow, are expected to post a disappointing result. Meanwhile, the nation’s 2015 labor market report that was released yesterday has confirmed the opinion that Singapore’s employment outlook is weakening.

February’s headline non-oil domestic exports are likely to have fallen 8.2% y/y, as compared with 9.9%. External demand continues to be weak. Moreover, China has remained a major drag on Singapore’s export performance.  Since mid-2015, NODX to China, which is Singapore’s largest, has been dropping sharply as it undergoes its own domestic reforms. In 2015, this resulted in manufacturing sector to contract 5.2%, the worst fall since the dot.com bust in 2001.

Furthermore, the manufacturing PMI for Fed fell to 48.5 from the prior figure of 49, the eighth continuous contraction. Moreover, the electronics PMI declined to 48.2, a drop of 0.3 points, which is the lowest reading since December 2012. This is further supported by the fact that PMIs of majority of key markets have declined. This fact has already been seen in the disappointing figures of export and industrial production across the region.

Meanwhile, the recent employment figure indicates that the number of worker redundancies has increased from 12,930 in 2014 to 15,580 in 2015. This is the highest since the 2009 global financial crisis. On the other hand, job vacancies are reducing along with worsening economic conditions. The labor market is faced with risks. If the Singaporean economic outlook continues to deteriorate, “labor pain” will start.