* Singapore Aug non-oil domestic exports fell 6.2 pct y/y
* Singapore Aug non-oil re-exports grew 14.4 pct y/y
* Credit Suisse, Barclays say GDP likely contracted in Q3
By Kevin Lim
SINGAPORE, Sept 17 Singapore's non-oil domestic
exports unexpectedly fell in August, pointing to continued
difficulties faced by its manufacturers even as the city-state's
overall trade figures underscored recent signs of improving
global demand for the region's shipments.
Singapore, a major regional transhipment hub and home to the
world's second busiest container port, provides a bird's
eye-view of the movement of goods to and from the region.
The wealthy city-state's August trade data, reported on
Tuesday, showed non-oil domestic exports dropped 6.2 percent
from a year ago, falling year-on-year for a seventh consecutive
month. The figure was also worse than the estimates of all 11
economists polled by Reuters, who had a median forecast of a 2.3
percent on-year rise.
Trade agency International Enterprise Singapore also revised
down domestic exports data for July.
Barclays and Credit Suisse expect Singapore's gross domestic
product could shrink sequentially in the third quarter after
growing an unusually strong annualised quarter-on-quarter pace
of 15.5 percent in April-June.
"Numbers such as retail sales, the food and beverage index,
and FX turnover have all corrected sequentially in the third
quarter," said Credit Suisse economist Michael Wan.
The data puts Singapore at odds with seemingly healthy
regional export trends.
Non-oil re-exports from the city-state, for instance, grew
14.4 percent from a year ago, accelerating from July's 8.1
percent expansion. The growth was led by re-export of
electronics, which rose 25.1 percent in August from a year ago
on the back of a sharp 36.3 percent rise in semiconductor
Re-exports are goods sent to Singapore for shipments to
other countries. The biggest recipients of non-oil re-exports
from the city-state last month were China, Hong Kong and
Malaysia, according to IE Singapore.
"Regional trade is becoming more vibrant as can be seen from
the re-exports portion... It's just that people don't want the
products we are producing," said United Overseas Bank economist
The robust re-exports of electronics also points to demand
for this sector gaining momentum.
Taiwan, home to some of the world's largest chipmakers, last
week reported August exports expanded for a fourth straight
month as shipments to China, its largest market, rebounded.
The Philippines followed in a similar vein, reporting July
electronics exports rising 11.2 percent from a year ago.
The healthy regional exports goes hand-in-hand with a recent
run of upbeat data from the world's two biggest economies, the
United States and China.
Japan's economy, the world's third-biggest, is also on a
more solid footing.
For Singapore's manufacturers, however, a near term recovery
doesn't seem likely. In seasonally adjusted terms, non-oil
domestic exports shrank 6.0 percent in August from July.
UOB's Tan and other economists said the continued weakness
in domestic exports last month meant Singapore could miss its
target for non-oil domestic exports growth of 0 to 1 percent
this year, although strong re-exports suggested trade-related
services sectors will continue to do relatively well.
Singapore last month revised upwards its 2013 growth to 2.5
to 3.5 percent from an earlier 1-3 percent after second quarter
gross domestic product came in much stronger than expected due
to the strong growth in wholesale and retail trade as well as
Singapore's exports tend to be unpredictable because a
significant portion involves pharmaceuticals and oil rigs that
can vary sharply from month to month.
The city-state's key electronics sectors include disk media
and PC components, which have not benefited from the boom in
smart phones and tablets that are replacing personal computers.
Credit Suisse's Wan, however, said a large part of the
weakness in August domestic exports can be explained by the
electronics sector, adding the divergence between Singapore's
exports and production in recent months suggest there could be a
correction in coming months.
(Reporting by Kevin Lim; Editing by Shri Navaratnam)