18-10-2011, 05:05 AM
Business Times - 18 Oct 2011
Exports surprise with 4.5% fall in Sept
Economists expect downward revision of Q3 growth figure
By CHUANG PECK MING
(SINGAPORE) Non-oil domestic exports unexpectedly fell last month, leading some economists to see a likely downward revision of the official economic growth estimates for the third quarter.
The NODX dipped 4.5 per cent year-on-year in September - the third contraction this year - against the market forecast of a 3.5 per cent rise. And August's 5.1 per cent increase was adjusted to 3.9 per cent.
Over the previous month, September's NODX tumbled by a seasonally-adjusted 9.3 per cent, against a 7.2 per cent jump in August, according to trade promotion agency International Enterprise Singapore, which released the latest trade numbers yesterday.
The government's flash estimate released last week showed Singapore narrowly escaped a technical recession in Q3, with the quarter posting a seasonally-adjusted growth of 1.3 per cent quarter-on-quarter. The economy grew 5.9 per cent year-on-year.
'There is a high chance of a downward revision,' said Chua Hak Bin of Bank of America Merrill Lynch. Added Selena Ling, Treasury Research and Strategy head at OCBC Bank: 'The September NODX data was unexpectedly weak.'
She noted that it's the biggest decline since October 2009 - and this could trim the final economic growth figures for Q3 to 1.7 per cent quarter-on-quarter, or 5.2 per cent year-on-year.
Maybank FX Research sees the year-on-year economic growth for Q3 revised down to 5.7 per cent.
Other economists expect the impact to be felt in Q4, with DBS Bank's Irvin Seah predicting the economy to go into the red that quarter.
'Plainly, September NODX has provided a glimpse of the rough patch ahead for the economy,' he said.
Credit Suisse's Wu Kun Lung has pencilled in zero sequential growth for Q4.
Looking at a broader demand slowdown to take hold, pushing growth down in Q4, Mr Chua of Bank of America Merrill Lynch also indicated other aggravating factors - the supply disruptions caused by the refinery fires at Bukom, Shell's biggest plant globally; and the flood in Thailand.
Identifying the culprits for the NODX's decline last month, Citigroup Singapore's Kit Wei Zheng noted there was a significant $1.5 billion pullback in the exports of ships and boats, more than the $1.4 billion fall in headline NODX.
'Had the level of exports of ships and boats remained unchanged, headline NODX would in fact have accelerated to 5.2 per cent year-on-year, declining only an estimated 1.1 per cent month-on-month seasonally-adjusted,' he said.
Mr Kit said the NODX's decline was worsened by the 8 per cent year-on-year drop in petrochemical shipments, 'perhaps reflecting the shutdown of Shell's refinery at the end of September'.
IE Singapore blamed NODX's contraction on 'a decline in electronic NODX which outweighed the expansion in non-electronic NODX'.
Electronic domestic exports continued to head south in September, but the 14 per cent year-on-year fall was less sharp than the 19 per cent decline in the previous month.
In fact, Citigroup's Mr Kit thought that electronics exports are stabilising.
Non-electronic shipments rose just 0.9 per cent last month, following a jump of 18 per cent in August.
Domestic exports to the United States plunged by 35 per cent year-on-year in September, extending the 23.1 per cent drop in the month before. Shipments to Taiwan also fell further, from 10.3 per cent to 18.9 per cent.
Domestic exports to the European Union, Singapore's biggest market, bounced back from 8.2 per cent decline in August to a 5.0 per cent growth last month.
Shipments to China still expanded, but growth eased from 15.3 per cent in the previous month to 4.6 per cent.
Exports surprise with 4.5% fall in Sept
Economists expect downward revision of Q3 growth figure
By CHUANG PECK MING
(SINGAPORE) Non-oil domestic exports unexpectedly fell last month, leading some economists to see a likely downward revision of the official economic growth estimates for the third quarter.
The NODX dipped 4.5 per cent year-on-year in September - the third contraction this year - against the market forecast of a 3.5 per cent rise. And August's 5.1 per cent increase was adjusted to 3.9 per cent.
Over the previous month, September's NODX tumbled by a seasonally-adjusted 9.3 per cent, against a 7.2 per cent jump in August, according to trade promotion agency International Enterprise Singapore, which released the latest trade numbers yesterday.
The government's flash estimate released last week showed Singapore narrowly escaped a technical recession in Q3, with the quarter posting a seasonally-adjusted growth of 1.3 per cent quarter-on-quarter. The economy grew 5.9 per cent year-on-year.
'There is a high chance of a downward revision,' said Chua Hak Bin of Bank of America Merrill Lynch. Added Selena Ling, Treasury Research and Strategy head at OCBC Bank: 'The September NODX data was unexpectedly weak.'
She noted that it's the biggest decline since October 2009 - and this could trim the final economic growth figures for Q3 to 1.7 per cent quarter-on-quarter, or 5.2 per cent year-on-year.
Maybank FX Research sees the year-on-year economic growth for Q3 revised down to 5.7 per cent.
Other economists expect the impact to be felt in Q4, with DBS Bank's Irvin Seah predicting the economy to go into the red that quarter.
'Plainly, September NODX has provided a glimpse of the rough patch ahead for the economy,' he said.
Credit Suisse's Wu Kun Lung has pencilled in zero sequential growth for Q4.
Looking at a broader demand slowdown to take hold, pushing growth down in Q4, Mr Chua of Bank of America Merrill Lynch also indicated other aggravating factors - the supply disruptions caused by the refinery fires at Bukom, Shell's biggest plant globally; and the flood in Thailand.
Identifying the culprits for the NODX's decline last month, Citigroup Singapore's Kit Wei Zheng noted there was a significant $1.5 billion pullback in the exports of ships and boats, more than the $1.4 billion fall in headline NODX.
'Had the level of exports of ships and boats remained unchanged, headline NODX would in fact have accelerated to 5.2 per cent year-on-year, declining only an estimated 1.1 per cent month-on-month seasonally-adjusted,' he said.
Mr Kit said the NODX's decline was worsened by the 8 per cent year-on-year drop in petrochemical shipments, 'perhaps reflecting the shutdown of Shell's refinery at the end of September'.
IE Singapore blamed NODX's contraction on 'a decline in electronic NODX which outweighed the expansion in non-electronic NODX'.
Electronic domestic exports continued to head south in September, but the 14 per cent year-on-year fall was less sharp than the 19 per cent decline in the previous month.
In fact, Citigroup's Mr Kit thought that electronics exports are stabilising.
Non-electronic shipments rose just 0.9 per cent last month, following a jump of 18 per cent in August.
Domestic exports to the United States plunged by 35 per cent year-on-year in September, extending the 23.1 per cent drop in the month before. Shipments to Taiwan also fell further, from 10.3 per cent to 18.9 per cent.
Domestic exports to the European Union, Singapore's biggest market, bounced back from 8.2 per cent decline in August to a 5.0 per cent growth last month.
Shipments to China still expanded, but growth eased from 15.3 per cent in the previous month to 4.6 per cent.