Unexpected NODX surge a mere one-off upside blip, says DBS

External demand did not improve.

The unexpected surge in March's headline non-oil domestic exports (NODX) figure was merely driven by a string of one-offs.

According to DBS, the NODX spike was mainly driven by a 65.9% year-on-year surge in pharmaceutical exports, which is one of the most volatile segments of the economy.

"Experience has taught us that as fast as it comes, the spike in pharmaceutical exports will vanish in a flash," stated DBS.

Apart from pharmaceuticals, exports of structures of ships and boats also jumped a staggering 337.6%, while aerospace product exports soared 433.7%.

"These are very lumpy items and orders were booked years before only to be recorded now upon delivery. The surges in exports of these items do not imply that external demand has improved significantly," DBS noted.

The March figure also reflects a "technical payback" from the massive slump in February, when NODX registered the lowest level since June 2009

"If it dropped so much earlier on, any uptick will seem like a lot," the report stated.