Exports dip on electronic output slump
SINGAPORE'S exports fell last month from a year ago as electronics shipments slumped, adding to fears that economic restructuring may be eroding local manufacturers' competitiveness.
Singapore's exports of electronics fell 17.4 per cent year-on-year last month, after a 15.3 per cent decline in May, trade agency International Enterprise Singapore said yesterday. That took non-oil domestic exports (Nodex) down 4.6 per cent last month from a year ago - double the 2.3 per cent drop forecast in a Reuters survey.
"This reinforces that Singapore's exports are underperforming... Singapore's exports are among the worst in Asia," said Tim Condon, head of research Asia for ING Bank in Singapore.
"My conjecture is that this is a structural issue and it's related to the productivity drive, that some of Singapore's exporters have relocated to Malaysia," Mr Condon said.
The contraction was in contrast to solid electronics exports from countries such as South Korea and Malaysia.
"This adds weight to the hypothesis... that restructuring, in particular the stricter foreign-worker policies, may be hurting manufacturing competitiveness," said Chua Hak Bin, head of emerging Asia economics for Bank of America Merrill Lynch in Singapore.
Singapore's unit labour cost index for the whole economy rose to 131.9 in the first quarter of this year, from 125.6 in Q4 2013, the Department of Statistics said. The manufacturing unit labour cost index was 105.8 in the first quarter, from fourth-quarter 2013's 102.1.
On a month-on-month basis, Nodex rose a seasonally adjusted 1.5 per cent last month, falling well short of a 4 per cent rise forecast in the Reuters poll.
While that was an improvement from a 7.5 per cent drop in May, the three-month moving average of the monthly percentage change in exports was barely positive at 0.8 per cent, showing how exports have struggled to gain traction from one month to the next.
Singapore's non-oil exports also tend to be volatile because a significant portion comprises pharmaceuticals and oil rigs, whose orders and output can vary sharply from month to month.
Underscoring such volatility, exports of pharmaceuticals surged 24.3 per cent from a year ago last month, after tumbling 26.3 per cent in May.