Singapore’s exports rebound but electronics show prevailing weakness

A view of the skyline of Singapore. (Reuters pic)

SINGAPORE: Singapore’s exports rose unexpectedly in Feb year-on-year, rebounding from its biggest fall in over two years, data on Monday showed, but economists say a decline in electronics shipments shows global demand has not improved.

Non-oil domestic exports (NODX) rose 4.9% in February year-on-year, data from the trade agency Enterprise Singapore showed, thanks to a surge in exports to China.

That marked a sharp turnaround from 10.1% contraction the month before and broke a run of three consecutive months of decline.

The Feb reading was also better than the 3.4% contraction predicted in a Reuters poll, however, economists said an 8% on-year decline in electronics exports remains a worrying sign for Singapore’s economy.

“What we are more concerned about is the lacklustre print in electronic exports. This reinforces our view for the continued fading of the tech boom that is seen broadly across Asia,” UOB economist Barnabas Gan said, adding that last month’s Lunar New Year break may also have masked underlying export weakness.

February’s electronics reading was an improvement on January’s 15.9% contraction.

Exports to the city-state’s top trade partner China jumped 34.4% on-year in February – rebounding from a 25.4% contraction in January. Exports to the United States rose 6.6% from a 4.6%  decline the previous month.

Shipments of non-monetary gold and pharmaceuticals bolstered Feb’s reading, jumping 258% and 12%, respectively.

The city-state is a big regional player in the gold trade, and exports can be impacted by sharp swings in value. Spot gold hit a 10-month high in Feb, according to Refinitiv data.

But the upswings in these volatile sectors did little to reassure economists wondering whether Singapore’s central bank will be knocked off its tighter policy path at the first of its semi-annual policy meetings next month.

“With the wind of global central banks easing blowing, the MAS (Monetary Authority of Singapore) will find it hard to remain on the tightening path,” ING said in a note following the data release.

On a seasonally adjusted month-on-month basis, exports expanded 16% in February after declining 5.7%  in January. The poll called for a 2.4% expansion from the month before.