Singapore’s non-oil exports probably stayed almost flat in September as weakening output from the volatile drugs sector failed to offset continuously poor electronics shipments, a Reuters poll showed.
Seven economists surveyed forecast that non-oil domestic exports, or NODX, rose a seasonally adjusted 0.5% in September from August with estimates ranging from a drop of 1.6% to a rise of 1.1%.
Exports rose 2.1% in August, rising for the fourth straight month, after gaining 0.5% in July.
“Electronics NODX has been contracting since the start of the year and the chance is high that it will remain stuck in negative territory for another month as leading indicators are not pointing to any sign of a significant turnaround in electronics demand any time soon,” DBS economist Irvin Seah said.
“Indeed, nothing much has changed from the previous month except that the much-needed lift from pharmaceuticals exports may prove somewhat lacking in September.”
Pharmaceuticals output, which makes up for 22% of the trade-dependent island’s total manufacturing, is highly volatile as drug companies often switch products and shut down plants to prepare for the production of another drug.
More importantly, key electronics exports have struggled with weak global demand for disk drives and other tech components this year, prompting the government in July to cut its 2007 non-oil domestic exports forecast to 4-6% from 7-9%.
Some economists said that unlike Taiwan and South Korea, where electronics exports are buoyed by China, Singapore’s tech sector has been hurt by disk-drive production shifting to low-cost centers. Electronic shipments make up about 40% of the island’s non-oil exports.
Economists said that after four straight months of rising exports and given the possibility of maintenance and plant shutdowns in the pharmaceuticals sector, month-on-month NODX growth will likely have moderated.
From a year earlier, exports in September were estimated to have risen eight percent, the poll showed. (Reuters)