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Singapore's NODX slump reinforces weak outlook for trade-reliant economy

A container vessel docks at the Tanjong Pagar Terminal in Singapore.
Suhaimi Abdullah | Getty Images
A container vessel docks at the Tanjong Pagar Terminal in Singapore.

Singapore's non-oil domestic exports (NODX) fell sharply in April from a year earlier, reinforcing the weak outlook for the trade-reliant economy and keeping the possibility of further stimulus on the table.

Shrinking demand from China and the United states meant NODX slid 7.9 percent year-on-year in April, in line with the median forecast in a Reuters poll, according to data published on Tuesday by trade agency International Enterprise Singapore.

In March, overseas sales tumbled a revised 15.7 percent on-year.

On a month-on-month, seasonally adjusted basis, non-oil domestic exports in April grew 4.5 percent, beating a forecast of a 4.0 percent monthly expansion in the survey.

"Export data from Singapore as well as the region confirm persistent cyclical and structural pressures on Asian trade," said Weiwen Ng, an economist for ANZ in Singapore.

"Should the dismal export print persist or worsen, it will raise the odds of downside risks to Singapore's growth and put an October MAS easing into view, though that's not our base case at this juncture."

Last month, the Monetary Authority of Singapore unexpectedly eased its exchange-rate based monetary policy as growth stalled in the first quarter.

Exports to China, Singapore's top overseas market, fell 7.4 percent in April from a year earlier, after declining 14.0 percent in March.

China's solid March data had raised prospects that the world's second-largest economy was bottoming out from a prolonged slump, but such hopes waned on mixed April economic indicators and rising debt levels.

Sales to the United States slumped 7.0 percent last month on-year, compared with March's 6.2 percent contraction.

"The trade outlook for the region remains quite lackluster so we think this NODX slump could drag into the second quarter," said Selena Ling, an economist at OCBC Bank.

Singapore's container volumes fell 7.9 percent in the first four months of 2016 from a year earlier.

NODX to Europe climbed 20.6 percent in April on a jump in sales of non-electronic items.

Electronics exports in April shrank 7.4 percent from a year earlier, while volatile pharmaceuticals shipments grew 17.9 percent.

Singapore's electronics sector has been underperforming neighbors such as South Korea and Taiwan on fierce competition, as well as a lack of popular high-tech products such as smartphones.

Activity in local factories contracted for a 10th consecutive month in April, although the manufacturing index reached its highest level since June, with new orders improving, a survey showed earlier this month.

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