Singapore June exports post largest fall in 6 years on sluggish global chip demand

19, Jul. 2019

SINGAPORE, NNA - Singapore's exports posted the biggest year-on-year decline in more than six years in June on continued sluggish global demand for semiconductors, official data released Wednesday showed, raising the odds that the export-reliant economy is set to suffer a hefty contraction in shipments to the world this year.

Key Points:

―― Non-oil domestic exports, the key measure of exports of goods, decreased 17.3 percent in June from a year earlier, following a 16.3 percent decline in May, hit by slowing demand for electronics, Enterprise Singapore said. It was the biggest year-on-year drop since a 33.2 percent decline in February 2013, according to the Straits Times.

―― Exports posted the fourth straight month of double-digit percentage declines.

―― Exports to China, Singapore’s largest market, fell 15.8 percent, while those to the European Union, the third biggest, slumped 22.1 percent. But exports to the United States, the second biggest buyer of goods from Singapore, rose 1.5 percent.

―― Shipments of electronics tumbled 31.9 percent last month, the biggest decline since 1997, when the government began compiling trade data under the current formula. It followed a similar 31.6 percent drop in May. Exports of integrated circuits, personal computers and disk media products fell 33.0 percent, 44.6 percent and 41.7 percent respectively.

―― On a seasonally adjusted basis, exports dipped 7.6 percent on the month after rising 5.8 percent in May.

―― In the first six months of the year, exports dropped 11 percent from a year earlier.

Takeaway:

―― Economists warn that Singapore's decline in exports for this year is likely to be worse than the government's forecast of a range of zero to a 2 percent fall, citing the continued downtrend of global semiconductor demand and effects of the U.S.-China trade dispute on global growth.

―― Malaysia's MayBank Kim Eng Securities forecast exports will drop 8 percent to 10 percent in 2019 while United Overseas Bank sees a 6 percent decline. Sumitomo Mitsui Banking Corp. expects a larger 10 percent slump.