Chart of the Day: See how Singapore's exports are trailing far behind Korea's and Taiwan's

Both countries grow as we stunt.

Singapore has been continually alarmed by its failing manufacturing sector, especially in terms of non-oil domestic exports (NODX).

A report by HSBC syas that the simultaneous curbs on foreign workers adds a degree of haste to the rebalancing process, as wages are starting to increase and productivity gains are not yet adequate to offset this.  A tangible short-term side-effect has been sticky core CPI, which is likely to persist into 2015 and will be the main focus of monetary policy, given the MAS’ forward-looking track record. The cyclical woes derive from the external sector and weak global import demand, but there is also a structural component to trade, especially in the dominant electronics sector.  

According to the report, Singapore’s non-oil domestic exports (NODX) have faced considerable  difficulties as electronics exports have declined for  25 consecutive months, in contrast with the relatively strong momentum in Korea and Taiwan.

HSBC adds that the overarching risk is that the aforementioned high wages, coupled with the excess capacity, continue to drag down domestic exports for a longer period than expected.

Together with a soft property market and rising unit labour costs in services industries, GDP faces downside risks, HSBC concludes.