Why the disappointing drop in electronics export sales isn't surprising

Analysts point out 2 reasons.

According to DBS, June non-oil domestic exports (NODX) plunged by 8.8% YoY, which is in line with their expectation.

DBS reitereated that a high base is in the work, depressing the headline number while fundamentally, demand hasn’t been that strong to begin with.

Here's more from DBS:

The continued decline in electronics export sales was not surprising. Demand hasn’t been strong and Singapore’s manufacturers are also losing their competitive edge. Coupled with the sharp down-swing in pharmaceutical sales (-35.4%), it’s no wonder the number looks so dire.

Plainly, the external headwinds remain strong. Data from the US have been mixed and Europe is still stuck in recession. While most Asia economies are still holding firm, China appears to be going through an internal consolidation and the overall demand from the region should likewise ease along with this Asia dragon.

The outlook for NODX is at best flat, judging from the fact that global outlook remains clouded with uncertainties.

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