Singapore Exports Fall Again, But Decline Narrows Amid Fragile Recovery -- Update

By Ronnie Harui and Kimberley Kao

SINGAPORE--Singapore's non-oil domestic exports fell for a third straight month in April, but narrowed their decline amid what economists say looks like a gradual but fragile trade recovery in the Southeast Asian hub.

Non-oil domestic exports dropped 9.3% from a year earlier last month, Enterprise Singapore said Friday. That was better than the median estimate for a 10.0% decrease in a Wall Street Journal of nine economists, and March's revised 20.8% slump.

April's "decline was from a high base a year ago and due to non-electronics--primarily, volatile products like pharmaceuticals," Enterprise Singapore said in a statement. Shipments for electronics returned to growth, it added.

Exports improved on a monthly basis. On a month-over-month seasonally adjusted basis, non-oil domestic exports rose 7.6% in April. That was in line with the median estimate for a 7.7% increase and better than March's revised 8.5% decrease.

Economists viewed the data as supporting their expectations that trade will pick up later in the year, though the recovery will be gradual and uneven. Continued risks from factors like geopolitics and wobbly demand still loom large for the Singapore export outlook, and could counter tailwinds from the global electronics upcycle.

"Ongoing global uncertainties...could keep the Singapore exports recovery fragile," DBS economist Chua Han Teng said in an emailed comment.

While the turnaround in Singapore's electronics exports is encouraging, geopolitical conflicts could disrupt supply chains, he said. The economist also flagged risks from the continued U.S.-China trade rivalry, as well as economic uncertainty around the timing of U.S. interest rate cuts, which could signal weaker global demand.

International price war among chip makers and sticky inflation could also weigh on Singapore export orders down the line, said Selena Ling, chief economist at OCBC.

In a note, Ling said she still expects the city-state's trade to slowly improve in the second half of the year, but much depends on electronic exports continuing to rebound and economic stability in China, a key trading partner, among other factors.

Singapore's exports to China jumped over 34% in April, second only to Malaysia as a top market destination. Shipments to the U.S. and EU stayed in contraction.

Friday's data showed that electronics exports rose 3.3% on the year in April, reversing from a revised 9.5% decline the prior month.

Non-electronics exports also did better, decelerating from a 23.2% slump in March to fall 12.3% in April. A main contributor was shipments of pharmaceuticals, which tend to be volatile, and plunged 73.3% last month, the data showed.

"Assuming that the global soft landing narrative sustains, Singapore's [non-oil domestic exports] growth should also benefit," OCBC's Ling said.

 
 
Singapore's Non-Oil Domestic Exports to Top Markets (% Y/Y) 
 
                            March      April 
U.S.                        -50.2       -40.6 
EU 27                       -45.4       -55.1 
South Korea                 -12.6       -23.8 
Taiwan                        2.0        -3.5 
Thailand                    -12.8        -1.8 
Japan                       -36.5         2.7 
Indonesia                   -10.3         5.1 
Hong Kong                    16.5        27.2 
Malaysia                    -11.4        45.6 
China                        12.0        34.5 
 

Write to Ronnie Harui at [e-mail] and Kimberley Kao at [e-mail]

(END) Dow Jones Newswires

05-17-24 0053ET