Non-oil domestic exports may drop 6.8% in October

Non-oil domestic export figure for Oct11 due this Thursday will provide a glimpse of what lies ahead in the fourth quarter. Unfortunately, it’ll not be a pretty picture or that’s what the headline will conveniently phrase it.

The NODX is expected to decline by 6.8% YoY. While dire as it may seem, it pays to note that NODX recorded its highest reading in October last year at SGD 16.8bn. That’s a huge base effect to reckon with, one that not only distraught the real picture but fits the pessimistic tune on the outlook of the global and Singapore economy perfectly. However, expect a modest positive bounce in the MoM sa figure of about 3-4%.

A gradual bottoming out in the electronics export sales as destocking pressure eased coupled with a bounce in pharmaceutical products will probably show that it’s not all doom and gloom out in the horizon. Nonetheless, it is undeniably true also that the overall growth outlook remains plagued with uncertainties. The negative impact of the Eurozone debt crisis will continue to pose a threat while fire at the Shell refinery may be manifested in the headline number. Indeed, risk of GDP shrinking in the fourth quarter cannot be discounted.