Singapore’s retail sales may have surged 8.1% in July

The Department of Statistics will announce Singapore’s retail sales numbers for July on 15  September. We expect retail sales to have risen by 8.1% y/y, slower than in June. Spending  remained firm as indicated by credit card billings, which continued to rise in double-digit terms y/y, while tourist arrivals were strong. Ex-auto, we expect the print to come in at 7.8% y/y. The domestic sector currently provides a bright spot amid the global market gloom. However, further deterioration on the external front is likely to affect domestic confidence given the economy’s openness.

On 16 September, International Enterprise Singapore will announce August’s non-oil domestic exports performance. July NODX was below expectations at -2.8% y/y, with electronics exports particularly weak at -16.9% y/y. Given the current negative impact on investor confidence due to global financial market turmoil, we do not expect a rebound in this indicator yet.

For August, we expect the headline NODX to have contracted by 9.2% y/y and electronics exports to have continued to fall, by 14.9% y/y. This is in line with the US semiconductor book-to-bill ratio, which fell further to 0.86 in July, the 10th consecutive month where the ratio below was 1.0.

While pharmaceuticals manufacturing rebounded in June and July, the high base in pharmaceuticals exports in August 2010 may negate any positive impetus on this front. The broader trend of easing Chinese PMI and US ISM readings also points to continued weakness for Singapore’s exports.