Singapore's non-oil domestic exports fell by 2.7% in March due to lower electronics exports.
According to ING Asia Pacific Economics head of research Rob Carnell, the drop is "a little" worrying. "Accounting for about 30% of total non-oil domestic exports, electronics are down whatever way you measure them," he said.
JP Morgan analyst Benjamin Shatil said the slowing in headline exports reflected broad-based declines, including a softening in tech exports. "This deceleration is in line with our forecast for a downshift in external demand through mid-year, in part reflecting a slowing tech cycle after strong gains in early Q1. Tech shipments were down 4.1% MoM and fell 4.4% 3Mo3M (seasonally adjusted). In recent years, demand for Singapore’s tech has followed that of Taiwan with a lag of three or four months; the recent data imply continued softening through mid-year," he added.
RHB Research expects NODX to moderate to +3.3% in 2018 from +4.1% in 2017, dragged by higher base effects and the withdrawal of demand from the smartphone supercycle.
Nevertheless, it projects that the moderation will be cushioned by several factors, "i. The increased production of a very popular radio frequency silicon-on-insulator (RFSOI) chips, used in smartphones; ii. Expected rising demand for capital goods, especially coming from the advanced economies. The growth in the US is expected to be stronger, underpinned by the tax cuts policy in late 2017. In the EU, unemployment continues to trend lower, and there is post-Brexit pent-up demand in private investments. For Japan growth is to be supported by preparations to host the 2020 Summer Olympics; iii. A rebound growth in the pharmaceuticals and marine offshore segments, amid expected improvements in demand."
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