Electronics exports still the main drag on NODX in September

Don't count on a strong recovery soon.

According to newly released government data, Singapore’s September non-oil domestic exports (NODX) contracted 1.2% y/y, a smaller amount compared to previous month (-6.8% y/y) and consensus estimates (-2.8% y/y).

This makes it the 8th straight month that NODX has contracted, but UOB Economic-Treasury Research notes that the rate of contraction seemed to have slowed, with electronics exports continuing to lead the decline.

"Again, the main drag on NODX came from the 14th consecutive month of contraction coming from electronics exports," said UOB.

"In September, this segment declined 5.5% y/y (although it is better than the 9.2% y/y decline in August) largely due to poor performance from disk media product (-36.5%), parts of PCs (-15.0%), and telecommunication equipment (-38.6%)."

While it is true that there is a cyclical recovery in global electronics demand afoot, which will likely boost electronics exports in the last three months of 2013, the recovery will likely be a muted one.

"At best, we may only likely see lower single-digits on-year growth rates till end of this year," reckoned UOB.