Lacklustre exports seen to be temporary:DBS

Despite ongoing worries on high oil prices derailing growth, PMIs of key markets have remained in the expansion zone.

According to DBS, recovery in the US is solidifying with increasingly strong consumption data.

Regarding the negative impact on exports due to the chain of events in Japan, DBS believes that there will surely be some drag over the next few months but this effect will likely be transient based on the experience of the Kobe 95 earthquake. Exports may even see some positive lift during the reconstruction period due to the need to rebuild production capacity and infrastructure.

The situation in Japan remains fluid and downside risks remain. However, although Japan is one of Singapore's largest export markets, accounting for about 6% of Singapore's total NODX share, it hasn't been the key driver of Singapore's export growth in recent years. The pace of recovery in the US and the sustainability of Asia (ex-Japan) demand are more important factors. And both factors are more likely to remain positive in the near term.