Plunge in drug exports extends NODX decline in October

Pharma drug exports plunged 36% for the month.

The slump in pharmaceutical drug exports was blamed for the worsening decline in Singapore's non-oil domestic exports (NODX) at 12.3% YoY, analysts said.

Reports by CGS-CIMB and OCBC Bank pointed at the 36% plunge in drug exports due to a high base effect in October 2018, and which mainly caused an 11.0% slip in non-electronics NODX. The former said that the high base is expected to abate by November.

These figures were also noted to be sharper declines compared to September when exports for drugs and non-electronics as a whole fell 26.7% and 2.3% respectively.

CGS-CIMB also said that a worsening MoM fall in petrochemicals exports to 19.2% from 10.6%, partly attributed to weaker selling prices and domestic supply disruption, also dragged on overall NODX.

On the other hand, a report by Nomura found electronic exports to be a key drag, which dropped 16.4% although moderating MoM from 24.8%. CGS-CIMB expects another steep correction in this sector for next month.

The contraction in NODX is tipped to ease to 5.5% YoY in November and revert to a positive 3.1% growth in December, translating to a full-year decline of 9.1%, OCBC said.