Worse-than-expected...
Singapore’s non-oil domestic exports (NODX) in Oct ’11 plunged by -16.2% YoY (consensus: -7.8% YoY), while Sep ‘11 figure was revised slightly to -4.6% YoY (previous: -4.5% YoY).
As both electronics and non-electronics exports slumped…
Electronics exports fell for the ninth consecutive month (Oct ‘11: -31.2% YoY; Sep ‘11: -13.6% YoY). Non-electronics exports also fell (Oct ’11: -6.7% YoY; Sep 2011: +0.7% YoY), dragged by lumpy exports like ships & boats (-55% YoY), specialized machinery (-24% YoY) and electrical machinery (-42% YoY) despite increases in chemical exports like pharmaceuticals (+7.8% YoY) and petrochemicals (+3%).
Dampened by lower shipments to major economies and North Asia…
By markets, major dampeners to last month’s NODX include US (-50.6% YoY), EU27 (-30.9% YoY), Japan (-6.3% YoY), Hong Kong (-30.5% YoY), Taiwan (-19.1% YoY) and South Korea (-4% YoY). These are compounded by slowing or lower exports to other regional markets like China (+3.1% YoY), Indonesia (+5.3%) and Malaysia (-6% YoY). Meanwhile, the impact of the flood in Thailand also surfaced last month (Oct ’11: -1.1% YoY; Sep ’11: +15.7% YoY).
Short-term leading indicator points to continued volatile NODX for the rest of the year…
NODX’s monthly YoY figures have been volatile, switching between growth and contractions, especially in 2H 2011, resulting in a sluggish 2011 YTD growth of +2.3% (Jan-Oct 2010: +25.8%; 2010: +22.8%), and our FX Research (based in Singapore) sees NODX remaining lackluster next year at around 3.3%.
Singapore’s purchasing managers index (PMI) on new export orders for overall manufacturing and electronics indicate persistent volatility in the remaining months of 2011. Although the index for manufacturing new export orders dropped for the sixth straight month to stay below 50 (Oct ’11: 46.8; Sep ’11: 47.6), suggesting continued weakness in near-term NODX, the index for electronics new export orders bounced back to above 50 for the first time in four month (Oct ’11: 50.8; Sep ’11: 46.1), pointing to possible short-term pick up in electronics exports.
Singapore: Non-Oil Domestic Exports (click to enlarge):
by Maybank Investment Bank
