Wild, Wild West: Singapore's exports to EU, US are going on a trip downhill

And recovery signs are nowhere to be seen.

A series of unfortunate events have recently lashed Singapore's exports as electronics and pharma segments dragged the numbers down. And to make matters way, way worse, its 3 biggest markets are also showings signs of unfavorable conditions ahead.

According to BNP Paribas, May NODX shipments were well below consensus expectations for a slight gain on both a sequential (0.6% m/m sa) and annual (0.5% y/y) basis. 

Here's more from BNP Paribas:

While manufacturing’s declining importance to the Singapore economy should limit any adverse impact on GDP growth, the obvious weakness in electronics bodes ill for similar shipments from Malaysia and Thailand. Matters are not helped by confirmation of substantial weakness in Chinese import demand, implying weak USD-denominated export receipts for ASEAN exporters are likely to persist.

Data regarding export markets offered some silver linings. EU demand looks to be exhibiting a more constructive trend despite registering a fall of 22% y/y in May. This suggests demand from European economies may be beginning to recover.

Nonetheless, it remains unlikely Singapore will see positive export growth to the EU on a sustained basis over the next 12 months.

Exports to China, on the other hand, were mixed. While direct NODX to China continued to register positive y/y growth (+7.1% y/y), combined HK and China shipments were down 8.0% y/y.

Arguably, given the strong historical relationship between shipments to China and the US suggests this dip reflects delayed effect of weak US demand in Q1.

Nonetheless, underlying momentum suggests Chinese import demand remains weak, corroborating the dramatic fall seen in mainland import data. Consequently, this bodes ill for regional export growth, especially for Malaysia and Indonesia, both of whom rely heavily on China as an export market.