20171218-大华银行-Macro_Note_4页_335kb

Singapore: November NODX Gave Clues Of What 2018 Entails

Core Content

The UOB Global Economics & Markets Research report analyzes Singapore's November non-oil domestic exports (NODX) and provides insights into the economic outlook for 2018. The report highlights the slowdown in NODX growth compared to previous months and discusses the underlying factors influencing the export performance.

Key Statistics

• Non-oil Domestic Exports (NODX) in November 2017 increased by 9.1% y/y, slightly lower than the 20.5% y/y growth in October, but still higher than market expectations of 6.4% y/y.
• On a month-on-month (m/m) seasonally adjusted (SA) basis, NODX growth slowed to 8.7%, from 12.3% in October.
• Oil domestic exports grew by 31.0% y/y, marking the 15th consecutive month of expansion after a 24-month decline.
• Non-oil re-exports (NORX) increased by 3.9% y/y in November, following a 0.9% y/y decline in October. On a m/m SA basis, NORX rose 6.6%, after a 3.2% contraction in October.

Main Points

• Electronics NODX grew by 5.2% y/y, up from 4.5% y/y in October, and marked the second consecutive month of growth after a decline in September. Key contributors were:
  • ICs: +9.6% y/y
  • Disk media products: +21.6% y/y
  • Other computer peripherals: +70.3% y/y
• Non-electronic NODX grew by 10.6% y/y, a slowdown from the 28.1% y/y growth in October. The main drivers were:
  • Specialized machinery: +17.1% y/y
  • Primary chemicals: +38.5% y/y
  • The pharmaceuticals segment reversed the previous six months of contraction, but it is still down 17.3% y/y year-to-date.
• Exports to key markets:
  • China: +27.5% y/y (driven by non-monetary gold, primary chemicals, and optical goods)
  • South Korea: +34.4% y/y (specialized machinery, measuring instruments, and optical goods)
  • US: +15.3% y/y (disk media products, pharmaceuticals, and specialty chemicals)
• Exports to Taiwan and Hong Kong slowed, indicating a potential shift in regional demand.
• The base effect is beginning to influence NODX growth, as the strong performance from previous months may not be sustained in 2018.
• The electronics cycle may be nearing its end with the introduction of the next wave of smartphones, as seen in the correlation between Asia Pacific semiconductor sales and Singapore's electronics NODX.

Outlook and Adjustments

• The report remains positive about the overall NODX expansion in the future, primarily driven by semiconductor exports.
• However, it expresses doubt about the sustainability of the strong double-digit growth seen since November 2016.
• The year-to-date NODX growth was 9.4%, and the 2017 forecast has been adjusted from 7.5% to 9.0%.

Conclusion

Singapore's NODX growth in November 2017 showed signs of slowing, with both electronics and non-electronics segments contributing to the increase. While the overall outlook remains positive, the report warns that the strong growth may not continue into 2018 due to the potential end of the electronics cycle and the influence of base effects. The report also highlights the importance of key markets and the role of semiconductor sales as a leading indicator.