SINGAPORE : Singapore's non-oil domestic exports rebounded strongly in August. They grew 5.1 per cent from a year earlier, against the market consensus of a contraction of 6.5 per cent.
August's growth was also a reversal of a 2.8 per cent drop in July.
The figures help ease concerns over the prospect of a recession this year, after the Singapore economy shrank in the second quarter.
The surprise lift in August exports came from the sales of floating oil rigs, other marine vessels, and other specialised machinery such as optical equipment.
That contributed about 11 per cent of overall non-oil domestic exports that month, more than double the monthly average of 5 per cent in the first half of 2011. That helped keep overall export numbers afloat.
Song Seng Wun, regional economist at CIMB Research, said: "We saw S$1.8 billion worth of lumpy exports being recognised last month. It is significant because 11 per cent of overall NODX for that particular month ... it has averaged around S$500 million or around 5 per cent of overall NODX, without which August NODX would have declined closer to 5 per cent year-on-year rather than a surprise growth of 5 per cent. So that is the difference that we saw from a particular export item itself.
"Does that mean that the recession fear has been averted because of better-than-expected NODX for the month of August itself? Not necessarily, because if you look at the underlying performance of the other sectors, you will see that in particular electronics continues to be weak."
The export of non-electronics grew by 20 per cent. But total exports were dragged down by a drop in electronics, which extended their downward trend, falling 19 per cent.
The typically volatile pharmaceuticals sector was down 7.1 per cent.
On a month-on-month basis, exports grew 8.3 per cent. While that may ease some concerns of a technical recession, growth is expected to taper off towards the end of the year.
Only three of Singapore's top 10 export markets expanded in August - China (16 per cent), Thailand (10 per cent) and Japan (1.6 per cent).
Irvin Seah, a senior economist at DBS Bank, said: "Despite the fact that we are seeing some strong and healthy export numbers, it does not imply that the downside risks to growth has dissipated.
"In fact, if you look at the global environment, it is still plagued by uncertainties - the US and eurozone economies still have a lot of problems which need to be tackled. So essentially, that will imply significant downside risks to the Singapore economy going forward."
Indicators of manufacturing and business sentiment are still weak. And if the growth outlook remains soft, the Monetary Authority of Singapore is expected to make it more difficult for the Sing dollar to appreciate during its policy review next month.
Via: http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1153513/1/.html
References:
http://www.bloomberg.com/news/2011-09-16/singapore-exports-unexpectedly-rise-on-sales-of-ships-boats.html
http://www.reuters.com/article/2011/09/16/singapore-economy-exports-idUSS7E7IF00M20110916
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