SINGAPORE - Singapore's exports unexpectedly rose in February from a year ago, helped by a surge in shipments from the statistically volatile pharmaceuticals sector, but the broader trade outlook remains clouded by poor demand from Asian countries.
Non-oil domestic exports (NODX) rose 2.1 per cent in February from a year earlier, trade agency International Enterprise Singapore said in a statement on Thursday.
The median forecast in a Reuters survey was a contraction of 2.6 per cent. In January, exports fell by a revised 10.1 per cent from a year earlier.
Jeff Ng, an economist for Standard Chartered Bank, said despite the surprise increase, the numbers are not particularly impressive given the low export base a year earlier. "The result looks weak, given that the 3-month moving average continued to fall 5.6 per cent year-on-year," he said, adding that base effects will be higher in March and pose headwinds to the year-on-year reading.
Another concern is the sluggishness in exports to emerging Asian countries, Ng said. "Given our own house view that growth in the US and Europe may actually start to slow a bit, it does provide some challenges ahead," he said.
Like much of Asia, trade-reliant Singapore's export sector has been hit hard by a collapse in demand from major trading partners, particularly China. Data from the Singapore's main port operator showed container volume at the island's ports fell 9.7 per cent in the first two months of the year compared with the same period last year.
Exports to China, Singapore's top overseas market, fell 1.2 per cent in February from a year earlier, after a 25.2 per cent slide in January.
The slowdown in China, a major export market for commodities and consumer products, has dealt a severe blow to economies around the world, including Asian exporting giants such as Japan and South Korea.
An ongoing shift in Singapore's economy towards higher value-added services and away from the manufacturing sector bodes ill for the outlook for non-oil domestic exports, said Vaninder Singh, an economist for RBS. "As the transformation continues to unfold, the NODX number will continue to remain under pressure," he said.
Domestic exports of electronics rose 0.7 per cent, while shipments of pharmaceuticals, which are produced in batches in quantities that can vary sharply from month to month, jumped 40.0 per cent in February from a year earlier.
Singapore's electronics sector has been underperforming neighbours such as South Korea and Taiwan, due to the city-state's lack of popular high-tech products such as smartphones.