NODX short-term outlook remains "murky" despite possible December rebound

Headline PMI readings paint a souring picture.

Maybank Kim Eng said that its short term outlook for Singapore non-oil domestic exports (NODX) remains murky even as NODX growth likely to rebound in the final month of 2013.

The research firm explained that while domestic manufacturing PMI readings for the subcategory of new exports orders rose to 52.6 in Nov 2013 from 52.2 in October, the headline PMI readings actually moved in the opposite direction to 50.8 in Nov 2013 from 51.2 in Oct 2013.

Also Maybank cited softening PMI readings on the global front. Latest manufacturing PMI readings published by HSBC for China eased to 50.5 (Nov 2013: 50.8) indicating softer economic conditions while reading for the Eurozone improved to 52.7 (Nov 2013: 51.6) on the back of Germany’s advance to 54.2 (Nov 2013: 52.7).

Despite the expected 2013 rebound, Maybank predicts that 2013 is set for first NODX contraction since 2009.

"Judging from the Nov NODX performance with a huge MoM contraction at -16.9%, we expect the overall 2013 NODX to record a decline worse than the -3.9% contraction forecasted by the Survey of Professional Forecasters done by Monetary Authority of Singapore (MAS). With Oct the only month with a positive NODX growth, 2013 is set to be a disappointing year," said Maybank.