Singapore’s exports, which is already in double-digit drop for three straight months, fell again in June, with shipments in the key electronic sectors declining by nearly a third.
According to the data released by Enterprise Singapore on Wednesday (17 July), non-oil domestic exports (NODX) did not perform as well as expected, plunging 17.3% in June compared to a year ago.
In fact, it is worse than the initial forecast of 9.6% decline by private economists in a Bloomberg poll.
The June’s export figures, which comes after May’s preliminary decline of 15.9% was revised down to 16.3%, are being observed carefully for their impact on second-quarter economic data.
Based on this numbers, it appears that this is the biggest year-on-year drop since shipments sank 33.2% in February 2013.
The June’s figures comes in the wake of last week’s GDP data which performed extremely bad, much lower than economists’ prediction.
CIMB Private Banking economist Song Seng Wun told Straits Times that both trade and manufacturing numbers were expected to score poorly in June following the recent flash figures for Singapore’s GDP, which only grew by a scant of 0.1% in the second quarter.
Echoing the same sentiment, DBS senior economist Irvin Seah was quoted in ST stating, “It’s that familiar sinking feeling again. The recent set of bad data has dashed any hope of a recovery in the second half of this year.”
The data revealed that electronic NODX went down by 31.9% last month, which is a further decline of 31.6% from the month before. It is said that shrinking exports of integrated circuits, personal computers and disk media products contributed to the drop.
Adding to the bad news, for non-electronic shipments, NODX also went down by 12.4% on year in June, which is worse than the 11.1% recorded in the earlier month, as a results of lower gold, petrochemical and pharmaceutical exports.
As a whole, NODX witnessed a month-on-month fall by 7.6% to S$12.9 billion in June, even though it had a 5.8% increase in the previous month.
The total trade also decreased by 7.2% year on year in June since both exports and imports fell. The drop in May was revised downwards to 2.2%, from 2.1% before.
In addition, apart from the US, exports to all of Singapore’s top 10 markets also declined, led by Hong Kong, mainland China and Europe.
The root problems on the export outlook are trade tensions between the United States and China, weaker external demand and a fading semiconductor cycle.
Although trade talks have resumed unofficially following the meet-up between US President Donald Trump and Chinese President Xi Jinping at the Group of 20 summit last month, the tensions between the two giants continue to exist.
It appears that US persistently apply pressure on China, with President Trump planning to grow the US domestic content threshold for iron and steel in federal procurements.
On the other hand, China’s economic growth slowed to 6.2% in the second quarter, it’s worst recorded figure in at least 27 years.