A container ship docks at the terminal port in Singapore on June 17, 2016. Singapore exports rebounded sharply in May after months of sustained decline, official data showed June 17, confounding analysts forecasts for slower economic growth this year. / AFP PHOTO / ROSLAN RAHMAN
SINGAPORE: Singapore’s exports unexpectedly jumped in May, helped by gold and pharmaceuticals shipments, though analysts remain pessimistic about the trade outlook amid persistently sluggish global demand.
Non-oil domestic exports grew 11.6% in May from a year earlier, the trade agency International Enterprise Singapore said on Friday in a statement. That beat the median forecast of a 2.3% contraction in a Reuters poll.
On a month-on-month, seasonally adjusted basis, non-oil domestic exports in May expanded 16.8%, well above the median forecast of 2.6% growth.
Growth in the pharmaceutical trade, a typically volatile data series due to highly variable export batch sizes, helped give a lift to May exports, but sustainable drivers of external demand are still lacking, said Selena Ling, head of treasury research and strategy for OCBC Bank.
“Full year, IE Singapore is looking for a contraction and so are we,” Ling said.
Exports of non-electronic goods rose 19.0% in May from a year earlier. This was led by exports of pre-fabricated buildings, non-monetary gold and pharmaceuticals. Exports of non-monetary gold rose 436.7% from a year earlier.
The jump in gold exports was probably a reflection of selling of the precious commodity by Singapore-based dealers and traders for profit-taking, said Alvin Liew, an analyst for United Overseas Bank.
“Even though the domestic consumption of gold is very small, Singapore is a big regional player in the gold trade. And gold was a clear beneficiary of the uncertain environment in the first half of 2016,” Liew said in a research note, adding that gold has been one of the best-performing assets in 2016, with gains of nearly 21%.
“The high gold price could have led to gold dishoarding, incentivising sellers to come out to take advantage of the surge in gold prices,” he added.
The numbers show exports of non-monetary gold totalled S$389.95mil (RM1.19bil) in May, up from S$72.66mil (RM220.85mil) in May 2015. For the whole of 2015, non-monetary gold exports totalled S$1.07bil (RM3.25bil).
The top three major export destination for gold in May were Switzerland, Malaysia and China.
Last month, Singapore slashed its exports forecasts for this year. IE Singapore expects non-oil domestic exports to contract 3.0%-5.0%, down from previous projections of a 0.0%-2.0% expansion.
Exports to China, Singapore’s top overseas market, fell 10.1% in May from a year earlier, after declining 7.4% in April.
That came even as China’s imports in May reported the smallest decline since they turned negative in November 2014, spurring some hopes of a pick-up in domestic demand in the world’s second-largest economy.
Shipments to the United States grew 9.1% last month on-year, compared with a 7.0% slide in April.
Sales to Europe contracted 14.0% in May after gaining 20.6% in April. - Reuters
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