Chart of the Day: Why the massive drop in electronic exports shouldn't shock us

It's been 3 years since it started dipping.

Everyone must have been appalled when news of a big-time drop in electronic NODX broke out. The shocking news is that this shouldn't be surprising at all, as the electronic export values had been crashing down since October 2010.

According to UOB, Singapore’s electronic NODX continued another month of poor showing and the average share of electronic products to overall NODX in the first 5 months of 2014 fell to 28.7%. In comparison, just 10 years ago, slightly more than half (50.6%) of NODX were electronics-related.

Here's more from UOB:

In fact, since Oct 2010, electronic export values had been on a declining trend, pulling further away from the improving non-electronic exports. That said, this shows that Singapore’s exports are increasingly being diversified towards other product segments as the economy undergoes economic restructuring amid the current tight labour market condition.

Non-electronic NODX contracted by 2.4% y/y in May, reversing the 5.5% y/y expansion a month ago. The decline in May was led by a slowdown in pharmaceuticals (-26.3%), specialized machinery (-13.1%), and aircraft parts (-30.2%).

Non-oil re-exports (NORX) also declined 6.6% y/y in May, reversing the preceding 13 consecutive months of positive growth.

Part of the reason could be due to the high base in the same month last year, where NORX grew 18.2% y/y.

In May, electronic NORX grew 1.9% y/y, following the 10.6% y/y expansion in the previous month, and was due to growth in the diodes & transistors (+46.6%), ICs (+2.6%), and consumer electronics (+7.6%) segments.

However, non-electronic NORX fell by 10.9% y/y, after growing 2.4% y/y previously. It was weighed down by the contraction in structures of ships & boats (-98.6%), optical goods (-48.6%), and piston engineers (-20.6%).