Non-oil domestic exports surge 5.1% in August

August non-oil domestic export figures released this morning surprised with a solid 5.1% YoY, up from a decline of 2.8% in the previous month. While we do not discount the fact that economic conditions are worsening with the deteriorating sentiments, this set of figure is most encouraging given the exceptionally high base and negative currency effects.

Essentially, August 2010 recorded the second highest NODX value of SGD 15.8bn in the entire year and that’s a significant high base to contemplate. Concomitantly, the Sing dollar has also appreciated by about 11% in the last 12 months. And that’s a huge negative currency effect as well. So, with an extremely high base and a big negative effect, it is certainly a pleasant surprise that NODX posted a positive expansion.

However, the heart of the issue lies in the sequential change and on that, a robust 8.3% MoM sa was reported. That said, the twist to the story lies in the fact that this rosy set of figures came on the back of a one-off surge in ships/boats and optical apparatus. Key electronics has continued to slump (-19.4%) and even pharmaceutical sales was down by 7.1%. As such, while this set of NODX figures may calm some nerves, downside risk to growth remains.