By Amanda Lee


SINGAPORE--Singapore's non-oil domestic exports fell unexpectedly in February, but economists still see encouraging signs of a better trade outlook ahead.

The 0.1% on-year drop in exports last month was driven mainly by a decline in shipments of non-electronic goods, data from Enterprise Singapore showed Monday. That compared with a revised 16.7% expansion in January and missed the median estimate of six economists surveyed by The Wall Street Journal for a 4.7% increase.

Non-electronics exports declined 1.5% on year in February, compared with January's revised 21.1% expansion.

On a month-over-month seasonally adjusted basis, non-oil domestic exports decreased 4.8% in February. That compared with a revised increase of 2.2% in January.

February's reading marked a reversal from the return to growth seen the prior month, signaling shaky trade momentum for the Southeast Asian country at the start of 2024. However economists continue to see scope for a stronger trade performance this year, noting that a key factor behind the surprising slide into contraction was the timing of the Lunar New Year holidays.

Economists at UOB and DBS point out that export growth for January and February together was a solid 8.4% on year.

The combined data for the first two months of the year suggests an ongoing recovery, UOB economists Alvin Liew and Jester Koh wrote in a note. That's arguably a more reliable assessment than just February data as it partly accounts for the holiday's effects, they said.

To gauge key trends, the UOB economists "smooth the data" by calculating on-year changes of average NODX for the last six months. That affirms an upturn in electronics and semiconductors, and shows improvements in shipments to major markets like the U.S. and China, they added.

Singapore's electronics exports climbed 5.2% on year in February, accelerating from a revised 0.6% expansion seen the prior month, Enterprise Singapore's data showed.

The recovery of electronics exports is an encouraging sign, DBS economist Chua Han Teng said, with the segment delivering its best performance since around mid-2022.

"We expect electronics shipments to benefit from the gradual improvements in global semiconductor sales as demand and inventory normalizes after 2023's significant digestion," he told Dow Jones Newswires.

However, he warned that the global economic environment remains uncertain, flagging headwinds from factors such as high interest rates and geopolitical tensions.

"We expect a gradual and fragile exports recovery in 2024, with greater near-term volatility," Chua said. 


 
Non-Oil Domestic Exports to Top Markets (% Y/Y) 
 
                  January   February 
Hong Kong         +60.8     +143.6 
U.S.              +35.4     +17.1 
Indonesia         +0.5      +8.2 
China             +101.0    -0.1 
South Korea       +12.8     -1.9 
Thailand          -5.8      -7.6 
EU 27             -42.4     -7.3 
Taiwan            -31.9     -15.8 
Malaysia          +11.5     -13.0 
Japan             -26.7     -37.2

Write to Amanda Lee at amanda.lee@wsj.com


(END) Dow Jones Newswires

03-18-24 0216ET