Singapore exports posted an unexpectedly strong showing last month, but economists say it is not yet time to celebrate.
Last month’s increase was largely due to a low base in February last year, they noted.
Non-oil domestic exports (Nodx), the main measure of shipments, rose 2.1 per cent last month from a year earlier, a much better reading than the 0.8 per cent contraction economists were expecting.
This was also a dramatic turnaround from the 10.1 per cent contraction in the preceding month.
Nodx of electronics products ticked up 0.7 per cent in February over the same month a year earlier, while non-electronic Nodx expanded by 2.7 per cent, led by shipments of pharmaceuticals, non-monetary gold and jewellery.
Buyers of Singapore exports in the European Union, Hong Kong and Japan contributed most to Nodx growth last month.
Economists said last month’s surprisingly good performance was largely the result of a low base in February last year.
DBS economist Irvin Seah noted that the Nodx reading in February last year had been the lowest for the whole year, as well as the lowest since January 2009.
“(It) was essentially comparable to the levels recorded during the global financial crisis period,” he said. “With such a low comparison base, last month’s Nodx number coming in at a mere 2.1 per cent higher isn’t that great after all. So don’t pop the champagne yet.”
UOB economist Francis Tan called February’s number a “one-month wonder”.
Despite last month’s positive surprise, Nodx has shrunk 4.7 per cent so far this year, he noted.
Shipments are likely to return to contractionary territory this month and the next, he added.
Trade agency IE Singapore expects Nodx growth of between zero per cent and 2 per cent this year, while total trade is forecast to come in between negative 1 per cent and 1 per cent.
Last year was a dismal one for trade – Singapore’s Nodx slid 0.1 per cent while total trade fell 9.5 per cent amid the weak global economic outlook.
This article was first published on March 18, 2016.
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