By Amanda Lee and Fabiana Negrin Ochoa

Singapore's non-oil domestic exports slumped in March, sliding more than expected and continuing a bumpy start to the year that casts some uncertainty on the economic outlook.

The Southeast Asian trading hub's exports of products excluding oil and petroleum slid 20.7% from a year earlier last month, Enterprise Singapore said Wednesday. That was the sharpest fall in about seven months.

The drop in non-oil exports--a key gauge of the trade-reliant economy's growth--had been widely expected in part due to unfavorable base effects, but was markedly worse than the median estimate of seven economists surveyed by The Wall Street Journal, who had tipped an 8.0% drop. The result is also sharply down from a revised 0.2% decline in February.

Analysts will look to the data for insight into the city-state's economic prospects after initial estimates signaled soft growth at the start the year.

Along with industrial production figures for March, the trade print gives an indication of final growth numbers for the first quarter, Moody's Analytics economists said in a note. The third month of a quarter can swing initial GDP estimates, which are based on the first two months of the period.

Exports in the key electronics category fell 9.4% on year in March, reversing from growth the prior month. Non-electronics exports also worsened, falling 23.2% versus February's 1.7% contraction.

Shipments of pharmaceuticals, which slumped 70.3% on year, weighed heavily, Enterprise Singapore said. Damage was also done by shipments of structures of ships and boats, and non-monetary gold, which both slid sharply.

Though pharma's plunge was more dramatic, for ING economists the fall in electronics warrants more attention. They point out that pharma exports are particularly volatile, seeing the underperformance of Singapore's electronics sector relative to other Asian tech exporters as posing more of a concern.

Despite Wednesday's disappointment, many economists still see recovery in the year ahead, in part due to a rebound in global demand for electronics, though the path will be rough.

DBS continues to predict a gradual, fragile rebound in the city-state's exports this year, said Chua Han Teng, an economist at the bank. DBS expects shipments of electronics to benefit from the upswing in the global semiconductor cycle, he told Dow Jones Newswires.

Favorable base effects should also flatter Singapore's trade performance this year, UOB economists Alvin Liew and Jester Koh said in a note, after a weak showing in 2023.

A lot will depend on how well the economies of Singapore's trading partners fare.

The UOB economists see cracks starting to show in exports to advanced economies, possibly as high policy rates weigh on investment.

March's export data showed steep contractions nearly across the board in Singapore's top markets, including the U.S. and European Union. Shipments to China went in the opposite direction, returning to growth after a slight decline in February, in line with recently encouraging economic data from the country.

Despite challenges posed by tight financial conditions and global uncertainties, UOB still sees NODX reaching the top end of the official forecast range at 6.0% this year.

"Singapore's electronics exports should continue to improve, as evidenced by the better recent exports data from key semiconductor powerhouses such as South Korea and Taiwan," it said.

Non-Oil Domestic Exports to Top Markets (% Y/Y) 
Top Market    February   March 
China             -0.1   +11.9 
U.S.              17.1   -50.2 
Hong Kong        141.9   +16.5 
Malaysia           -13   -11.2 
South Korea       -1.9   -12.6 
Indonesia           +8   -10.3 
Thailand          -7.7   -12.8 
Japan            -37.2   -36.5 
Taiwan             -16      +2 
EU 27             -7.3   -45.4 

Write to Amanda Lee at

(END) Dow Jones Newswires

04-17-24 0217ET