Don’t be overjoyed by the record-breaking NODX surge, analysts warn

Full-year NODX is likely to contract.

It’s tempting to be excited over the record-breaking double-digit growth in Singapore’s March exports. After all, the 18.5% year-on-year export growth in March signifies the fastest pace of expansion in three years, apparently trumping naysayers about the country’s growth prospects.

However, analysts warn that the a month of strong NODX does not signify spring for local exports.

“We still maintain our 2015 NODX forecast of a 1% contraction, as we continue to see a slowdown in PC-related electronics exports as well as the trend where manufacturers shift focus to the export of services rather than merchandise. We also expect the exports of petrochemicals to come under pressure as the current oil price weakness persists at least in 1H 2015,” stated UOB’s Francis Tan.

OCBC’s Selena Ling added that the figure might reflect some payback for the Chinese New Year weakness in February and may not be sustained at such a strong clip for the following months.

“While one month of strong NODX does not signify spring, nevertheless the Singapore economy should be able to achieve the moderate 2-4% growth forecast for 2015. [March NODX] boosted the March trade surplus to $8.64b, the highest since at least 1965 and surpassing the Jan level of $8.5b,” she noted.