June NODX rose 29 per cent y-o-y, electronic exports jumped sharply
(SINGAPORE) Better than expected Q2 trade figures have led Singapore to raise this year's forecasts for both total trade and non-oil domestic exports (NODX) growth to between 17 and 19 per cent.
Buoyant trade growth from Asian economies in the first half and Gartner's upgraded forecast for global semiconductor sales are other reasons for the upgrades, trade agency International Enterprise Singapore said yesterday.
Previous forecasts for both NODX and total trade growth in 2010 were 15-17 per cent and 14-16 per cent respectively. These upgrades accompanied news of a sharp upward revision to the official GDP forecast, and strong trade numbers for June.
NODX grew 29 per cent year-on-year last month, regaining its pace after growth slowed to 24 per cent in May from April's 30 per cent surge.
Singapore's NODX in Q2 thus grew a larger than expected 28 per cent year-on-year.
Higher domestic exports of integrated circuits, IC parts and computer parts led to the 44 per cent jump in electronic NODX last month, up from May's 39 per cent increase.
And the rebound in pharmaceutical exports, as well as increased shipments of petrochemicals and machinery exports, pushed non-electronic NODX 21 per cent higher, after May's 16 per cent rise.
In sequential terms, however, exports eased for a second straight month in June. After seasonal adjustments, last month's NODX fell a marginal 0.1 per cent month-on-month, after a 0.2 per cent fall in May.
Economists say this mirrors a regional moderation in the pace of trade growth and the dissipation of low-base effects, and does not affect the strong trade outlook for the year.
HSBC's Frederic Neumann noted that Korea and Taiwan's overall shipments cooled markedly in June, while China's export data (which usually lags other Asian exporters) is expected to slow in the third quarter too.
And while the easing is an indication of softer trade flows ahead, it could also reflect typical mid-year quiet before the large shipping cycle ahead of Christmas begins, Barclays Capital economist Leong Wai Ho said.
Domestic exports to all of Singapore's top ten NODX markets grew in June, but Europe was the top contributor to NODX expansion.
NODX to the European Union jumped 75 per cent in June, from a pullback to 5.7 per cent growth in May, affirming what most economists have said about the limited impact of Europe's debt woes and austerity measures on Singapore's exports.
'Singapore's trade with Europe is fairly defensive in that a lot of it is intra-industry in nature, for example pharmaceutical and electronics trade, which is not so easily disrupted,' said Mr Leong.
Electronic exports to EU jumped 88 per cent while pharmaceutical exports to the region more than doubled.
Other top contributors in June were Japan and China, which saw shipments jump 50 per cent and 39 per cent respectively, though these were smaller than May's gains.
But NODX to the US stayed flat, as growth in electronic exports was offset by a fall in exports of ships and boats, and medical and electrical circuit apparatus.
Source: Business Times, 15 Jul 2010