SINGAPORE (Sept 17): Singapore's exports in August rose more than expected thanks to a jump in chemical product shipments, although exports to major markets slowed in a sign that the city-state's economy is being hobbled by an uneven global recovery.
Non-oil domestic exports (NODX) increased 6.0 percent in August from a year earlier, trade agency International Enterprise Singapore said on Wednesday in a statement. That compared with a 2.6 percent growth forecast in a Reuters poll, and a 3.3 percent decline in July.
On a month-on-month seasonally adjusted basis, NODX grew 7.6 percent, sharply above the forecast rise of 1.0 percent.
Still, while the headline numbers handily beat expectations, largely due to a jump in pharmaceuticals and petrochemicals shipments, the overall data showed that Singapore's exports remained sluggish at best as sales to key markets slowed.
NODX to the United States rose 5.1 percent in August from a year earlier, from 8.6 percent growth in the prior month. Shipments to China gained 5.8 percent last month after rising 7.0 percent in July.
Shipments to the European Union (EU) slowed much further, growing 7.0 percent in August, compared with a 24.8 percent rise the previous month.
"There could be some slowing external demand," Francis Tan, an economist for United Overseas Bank, adding that could hurt Singapore exports in the coming months.
The city-state's economy narrowly avoided a contraction in April-June on a quarterly basis.
The trade data comes ahead of the central bank's semi-annual monetary policy meeting in October. For now, the Monetary Authority of Singapore is expected to stick to its tight monetary policy stance.
The Singapore dollar edged down to 1.2610 per the U.S. dollar as of 0056 GMT from the previous day's close of 1.2601.
ELECTRONICS EXPORTS STILL STRUGGLING
In the latest month, NODX of pharmaceuticals rose 26.9 percent from a year ago, while petrochemicals shipments jumped 39.9 percent.
Electronics exports in August, however, continued to drop. They fell 6.9 percent from a year earlier after easing 7.9 percent in the previous month.
The sector is a key driver of Singapore exports, but it has been lagging regional competitors such as South Korea and Taiwan due to stiff competition and a lack of popular high-tech products including smartphones.
Singapore's manufacturing activity contracted for the first time in eight months in August, hurt by lower new orders and a contraction in new exporters orders amid cooling factory activity across Asia.
Economists have lowered their Singapore 2014 economic growth forecast compared with three months ago, a central bank survey showed on Sept. 10. They also revised their outlook for NODX to a 1.1 percent contraction from a 4.1 percent expansion.
China's factory output grew at the slowest pace in nearly six years in August while growth in other key sectors also slowed, spurring concerns over a sharp slowdown in the world's second-largest economy.