SINGAPORE (June 19): Maybank Kim Eng Research is forecasting Singapore’s non-oil domestic exports (NODX) to revert back to positive growth in the coming months, while also expecting the gross domestic product (GDP) recovery to continue broadening to 3% growth for 2017.

In a Monday report, analysts Chua Hak Bin and Lee Ju Ye note a strong and bullish trade picture based on May’s trade data in spite of the negative headline print for NODX, which they say is consistent with other transport metrics such as container throughput, which rose by 12.2% in May to a record high.

In particular, Chua and Lee have highlighted electronics export growth, which accelerated to 23.3% growth in May from a 4.8% increase in April this year, as a more reliable gauge of global demand.

“The tech upswing is not showing any signs of moderating and [instead] appears to be strengthening,” note the analysts.

This, they add, suggests that data for May’s manufacturing growth – due to be announced next week – is likely to remain strong.

Furthermore, non-oil re-exports surged by 14.3% from a year ago, which the analysts believe points to stronger wholesale trade services growth in 2Q17.

“Electronics exports jumped by +23.3%, supported by the usual drivers – Integrated Circuits (+31.2%), parts of PCs (+26.2%) –and also PCs (+64.7%), which swung back to positive growth after 7 consecutive months of decline,” recall Chua and Lee.  

“On the other hand, non-electronics exports (-9.0%) were weighed down by civil engineering equipment parts (-92.5%), non-monetary gold (-24.6%) and pharmaceuticals (-14.2%). The high base effect was mainly reflected in non-monetary gold exports, which surged by +437% in May last year.”