Singapore
July Trade Dipped Significantly
Aug 17, 2006

Deyi Tan (Singapore)

July export momentum came off significantly, rising 13.6% year on year (YoY) (versus +21.6% in June).  Meanwhile, imports broadly sustained strength at 18.5% YoY (versus +20.8% in June).  Non-oil domestic exports dipped into single-digit territory at 8.4% YoY (versus +16.9% in June), rising lower than our and market expectations of 15.0% and 13.6%, respectively.  Consequently, the trade surplus narrowed to S$2.9 billion from S$4.1 billion. 

Electronics NODX decelerated.  There was no benign volatility from non-electronics either: the moderation in NODX was evident in both the electronic and non-electronic segments.  Electronic NODX softened to 5.0% YoY from 9.1% in June.  With the exception of telecoms (+32.7% YoY versus +31.2%), other major products such as integrated circuits (+16.8% in July versus +36.7% in June), PCs (-21.4% versus -20.3%), PC parts (+3.9% versus +5.2%) and disk drives (-23.3% versus -35.1%) all decelerated.  There was no benign volatility in the non-electronics segment, with momentum in pharmaceuticals (+7.1% versus +24.9%) and petrochemicals (+11.5% versus +32.2%) both turning down. 

Demand divergence between export markets.   Meanwhile, the market data breakdown shows a demand divergence between the main trading partners in July.  NODX to US went on to expand by 23.3% YoY (versus +20.5% in Jun) and was the largest incremental contributor with 3.5 percentage points (pp) (versus +3.0 pp in June).  However, demand from EU (-9.6% in July versus -6.1% in June), Japan (-12.6% versus +13.2%) and China (-6.0% versus +31.9%) weakened.  In total, the latter three knocked 3.2pp off headline growth, compared with adding 2.7pp in June.





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