Singapore’s non-oil domestic exports fell 1.1 percent in September on-year, due to a decrease in electronics shipments, a media release from the trade agency International Enterprise Singapore (IES) said.
The contraction, after ten consecutive months of growth in non-oil domestic exports (NODX) culminating in a 16.7-percent growth in August, has taken economists by surprise. Economists in a Reuters poll had expected a 12.7-percent expansion in exports.
“While we had expected some NODX retraction in the fourth quarter of the year due to the higher base in the fourth quarter of 2016, the drop-off in NODX momentum admittedly came slightly earlier than expected,” Selina Ling, head of Treasury Research at OCBC Bank, told the Business Times.
Nomura economist Brian Tan told Reuters that the moderation in electronics export was expected and that economists had generally been cautious about that sector. “It was always going to be very difficult to sustain a double-digit electronics growth, both on export and production side,” he said.
The IES news release noted that electronics exports fell by 7.9 percent in September on a year-on-year basis, after a 20.8 percent expansion in August.
The exports that weighed down growth were personal computers, integrated circuits, as well as diodes and transistors, which fell 17.6, 4.1 and 18.1 percent respectively.
Singapore relies heavily on electronics exports and has been experiencing growth in that sector in recent months due to global demand for components such as semiconductors. Analysts say it is premature to confirm a broader decline in demand for Singapore’s electronic goods based on the current data.
The poor showing in September’s exports mean that advance estimates on Singapore’s third-quarter GDP from the Ministry of Trade and Industry might have to be revised downward.
The estimates released on Oct. 13 indicated a 4.6-percent growth compared to the corresponding quarter a year ago. The growth, driven partly by the electronics sector, had exceeded experts’ predictions.
South Korea and Taiwan, two of Asia’s major tech exporters posted “stronger-than-expected shipments in September” a Reuters report said.