NODX grows by 6.0%, but misses expecations: OCBC

The market expected exports to grow by 11.0% in April, while OCBC expected 9.6% growth. Both were wrong.

Non-oil domestic exports (NODX) grew for the fifth straight month in April, at 6.0%, latest government data has shown.

However, analysts expected a much higher exports growth for the month, with a market consensus of 11.0%. OCBC Treasury Research, for its part, expected a 9.6% growth.

April’s figures weres also lower than the 11.9% growth recorded in March.

“There is a risk that NODX momentum may moderate further in the coming months due to the global COVID situation and tightening of restriction measures both globally and domestically,” Selena Ling, Head of Treasury Research & Strategy for Global Treasury of OCBC Bank said in a statement.

The bank noted that electronics exports slowed to 10.9% compared to the 24.4% recorded in the same period last year. The growth rate of non-electronic exports was also halved at 4.7% this April, compared to the 9.2% recorded in the same period last year, despite the fifth straight month of expansion.

OCBC noted that the main drag in exports came from the US, Japan and the EU, which declined by 42.3%, 33.2% and 30.2% respectively. NODX to China remained bouyant at 55.5% in April, while NODX to Malaysia, Indonesia and the Hong Kong posted double-digit growth.

On the other hand, UOB Global Economics & Markets Research economist Barnabas Gan said the recent declaration of Phase Two and Phase Two Heightened Alert (HA) measures to prevent the spread of COVID-19 in Singapore will have little impact on the economy.

“We note that Phase Two (HA) is slated to last for only a month until 13 June 2021, on top of the fact that all businesses will be allowed to operate during this period. This is compared to the Circuit Breaker (7 April – 1 June 2020) where only essential services are allowed to stay open,” Gan said in a separate statement.

Yun Liu, economist for HSBC Global Research, said that April’s figures could mark a turning point for Singapore’s trade sector.

“While both industrial production and trade performance turned out to be stronger-than-expected in 1Q, we think some pandemic-related sectors will see moderating growth in 2021. But still, external resilience should remain a bedrock for Singapore's sustained economic recovery this year,” Yun said.