Chart of the Day: No hope in sight for local manufacturers as Chinese demand slides

China's importance is outstripping that of the EU and US.

Singapore's manufacturers are unlikely to see a significant and sustained recovery on back of persistently weak demand from China, according to BMI Research.

This chart shows that China is starting to overtake the European Union and the United States in terms of contribution to the city-state's total non-oil domestic exports (NODX).

"Singapore's exporters have yet to experience a respite despite signs of a nascent pick-up in trade activity elsewhere in Asia. While there is likely to be some cyclical improvement in trade flows over the coming months in line with the modest rebound in Chinese economic momentum, we continue to see little impetus for a meaningful recovery," BMI Research said.

Apart from weak external demand, manufacturers are also grappling with rising business costs on back of sustained wage growth.

While there is a very considerable silver lining to be found in Singapore's wage trends, the combination of deep export deflation and buoyant wages points towards eroding margins for exporters," said the report.

As a result, BMI Research has downgraded its export and import growth forecasts for 2016 to -1.4% and -1.2% respectively, compared to 1.7% and 1.9% previously.