Singapore: Strong export growth resumes in July on greater pharmaceutical shipments
Non-oil domestic exports (NODX) increased 11.8% in July in annual terms, picking up from June’s revised 0.8% increase (previously reported: +1.1% year-on-year) and markedly overshooting market expectations.
July’s uptick was driven by greater non-electronic exports—particularly of food preparations, pharmaceuticals and primary chemicals—and greater demand from the U.S, Japan and Indonesia. On the other hand, the important electronic sector saw exports decline year-on-year for the eighth consecutive month. After being a major driver of export growth for much of 2017 thanks to booming world trade, the performance of electronic exports so far in 2018 is being affected in part by tough year-on-year comparatives.
On a month-on-month seasonally adjusted basis, exports rose 4.3%, contrasting the previous month’s 11.1% fall.
Looking ahead, as the recent robust export performance has been underpinned in part by shipments from the volatile pharmaceuticals sector, it is uncertain whether growth will be maintained at its current pace. In addition, the risk of tit-for-tat tariffs between the U.S. and China descending into an all-out trade war is present; this would likely significantly dampen export performance and disrupt regional supply chains.