Singapore's exports in July fell less than expected as shipments to major economies picked up, suggesting the manufacturing sector may have bottomed out on the back of an improving economic outlook in the United States and signs of resilience in China.
Non-oil domestic exports (NODX) eased 3.3 percent in July from a year earlier, trade agency International Enterprise Singapore said on Monday in a statement, beating a forecast of a 3.9 percent slide in a Reuters poll.
On a month-on-month seasonally adjusted basis, NODX grew 2.5 percent, above a forecast of a 1.0 percent rise prediction.
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'It is, I suppose in line with the overall trend that we're seeing...of less bad figures," said Song Seng Wun, an economist for CIMB.
Song added that recent surveys of manufacturing activity have shown improvement, both in Singapore and the region, and globally as well.
Encouragingly, shipments to development markets and China rose in July - a hopeful sign for the rest of the year.
NODX to the United States rose 8.6 percent last month from a year earlier, after sliding 2.9 percent in the previous month. Shipments to China gained 7.0 percent in July, compared to a 5.3 percent rise in June.
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Shipments to the European Union (EU) jumped 24.8 percent in July from a year earlier. NODX to the EU in June declined 3.9 percent.
Electronics exports in July fell 7.9 percent from a year earlier, but the pace of decline slowed from a sharp 17.4 percent contraction in the previous month.
Electronics is a key driver of Singapore exports, but the sector has been lagging regional peers such as South Korea and Taiwan due stiff competition and a lack of popular high-tech products including smartphones.
Over the past year or so, the sector has also come under hollowing-out pressure - manufacturing being moved from a high-cost, well-developed country to a cheaper, emerging-market location.
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The government's push to reduce a politically-unpopular reliance on foreign labor as part of efforts to increase the economy's productivity has posed further challenges for manufacturers. The move has led to a tighter labor market, putting upward pressure on wages.
On Aug. 12, the trade agency said it revised down its 2014 NODX forecast to a 1.0-2.0 percent contraction from the previous projection of 1.0-3.0 percent growth.
Still, some economists said the manufacturing sectors may have reached a bottom with a survey showing factory activity expanded in July at its fastest rate in a year. [