Singapore's key exports chart surprise 3.5% slide in May as front-loading cools
The latest non-oil domestic exports (NODX) print reversed from the preceding month's 12.4 per cent jump and disappointed market expectations of 7.8 per cent growth, data from Enterprise Singapore showed on Tuesday (Jun 17). Shipments to most major trading partners fell, electronics NODX softened, and non-electronics exports contracted.
RHB group chief economist Barnabas Gan and associate research analyst Laalitha Raveenthar noted that economists had anticipated some potential upside from continued front-loading of exports during the 90-day trade truce, particularly between the US and China.
The latest data could indicate that the boost from front-loading ahead of higher US tariffs is fading rapidly, they said.
While Maybank analysts Chua Hak Bin and Brian Lee also acknowledged that the front-loading boost 'could be starting to cool', they also pointed to 'idiosyncratic factors in the form of non-monetary gold and petrochemicals' that amplified May's NODX decline.
Year on year, electronics exports gained 1.7 per cent in May, against April's 23.4 per cent expansion. PCs (50.9 per cent), integrated circuits (4.3 per cent) and consumer electronics (49 per cent) led the growth.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
Although still expansionary, electronics exports have slowed and are 'susceptible to downside risks from US levies on semiconductor imports that could still be on the cards', said DBS senior economist Chua Han Teng.
Meanwhile, non-electronics shipments contracted 5.3 per cent on the year, in a turnaround from the 9.3 per cent rise in April. The main drivers of the fall were petrochemicals (-17.8 per cent), non-monetary gold (-25.9 per cent) and specialised machinery (-11.7 per cent).
'Safe-haven gold demand eased on the back of the US-China tariff de-escalation,' noted Maybank's duo. They added that petrochemical shipments, 'plagued by weak downstream demand and oversupply from China's capacity expansion', has been lacklustre for some time.
In contrast, pharmaceutical exports remained positive. UOB associate economist Jester Koh said this possibly reflects some effects of front-loading, on fears of the implementation of threatened sectoral tariffs.
This is despite Deputy Prime Minister Gan Kim Yong's comment last month that Singapore may get a preferential tariff or exemption for pharmaceutical exports to the US, based on ongoing talks.
NODX to six of Singapore's top 10 markets slid. Key exports to the US (-20.6 per cent) and Thailand (-17 per cent) declined by double-digits. NODX to Malaysia, China, the European Union and Japan also fell, from the year-ago period.
Meanwhile, NODX to Hong Kong, South Korea, Indonesia and Taiwan still grew on year in May – but the expansions were significantly weaker than the year-on-year growth recorded in April.
The sluggish NODX outturn was not a huge surprise, said Koh, noting evidence of slowing export activity, such as month-on-month contractions in South Korea and Taiwan's imports from Singapore in May.
Headed for worse
Economists expect Singapore's trade data to continue to face pressure.
RHB' team expects a further slowdown in the coming months despite the temporary reprieve from reciprocal tariffs, as global demand eases and consumer spending weakens ahead of anticipated heavier duties later in the year.
Despite the seeming de-escalation of tensions between the US and China, they 'advise caution against premature optimism'.
Observers agreed that the impacts will particularly be felt in H2, on the back of front-loading payback and potential for further tariff developments.
The Maybank team said the magnitude of the payback and slowdown will depend on tariff outcomes for trading partners after the reciprocal tariff truce ends on Jul 8, while UOB's Koh flagged the possibility of a 'more protracted downturn'.
Koh also noted that escalating geopolitical tensions in the Middle East could further dampen business and consumer confidence.
UOB downgraded its full-year 2025 NODX forecast to between 1 and 3 per cent, from 2 to 4 per cent previously.
The situation remains fluid, Koh said, noting that US President Donald Trump last week said he intended to send letters to trading partners to set unilateral tariff rates ahead of the expiry of the pause on reciprocal tariffs – a development that markets are watching closely.
Economists are also keeping an eye out for the US' threatened sectoral tariffs.
On a seasonally adjusted monthly basis, NODX contracted 12 per cent, reversing from the preceding month's 10.4 per cent expansion.
Overall, total trade increased 1 per cent from the corresponding year-ago period in May, narrowing from the 14.7 per cent expansion in the preceding month. Total exports rose by 2.5 per cent, following April's 22.1 per cent. Total imports declined by 0.5 per cent, after the previous month's 6.9 per cent increase.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
3 hours ago
- Straits Times
Trump says US, Philippines ‘very close' to finalising trade deal
Find out what's new on ST website and app. Philippine President Ferdinand Marcos Jr (left) meeting US President Donald Trump at the White House on July 22. WASHINGTON - US President Donald Trump on July 22 welcomed Philippine President Ferdinand Marcos Jr to the White House, saying the two countries were close to finalising a trade agreement. 'We're going to talk about trade today and we are very close to finishing a trade deal, a big trade deal actually,' Mr Trump told reporters at the start of his meeting with the Philippine leader. Mr Marcos is the first South-east Asian leader to meet Mr Trump in his second term. Mr Trump has already struck trade deals with two of Manila's regional partners, Vietnam and Indonesia, but had been driving tough bargains in talks even with close allies Washington needs to keep onside in its strategic rivalry with China. The United States had a deficit of nearly US$5 billion (S$6.3 billion) with the Philippines in 2024 on bilateral goods trade of US$23.5 billion. Mr Trump this month raised the threatened 'reciprocal' tariffs on Philippine imports to 20 per cent from 17 per cent threatened in April. Mr Trump said the two countries did 'a lot of business' with each other, saying he was surprised to see what he called 'very big numbers' that would only grow under a trade agreement. Mr Gregory Poling, a South-east Asia expert at Washington's Centre for Strategic and International Studies, said Mr Marcos might be able to do better than Vietnam , with its agreement of a 20 per cent baseline tariff on its goods, and Indonesia at 19 per cent. Top stories Swipe. Select. Stay informed. Singapore Two found dead after fire in Toa Payoh flat Singapore Singaporeans aged 21 to 59 can claim $600 SG60 vouchers from July 22 Singapore Singaporeans continue to hold world's most powerful passport in latest ranking Singapore Singapore, Vietnam agree to step up defence ties, dialogue between leaders Asia Malaysia govt's reform pledge tested as DAP chief bows over unresolved 2009 death of political aide Tech Singapore to increase pool of early adopters in AI to complement data scientists, engineers Singapore Prosecution says judge who acquitted duo of bribing ex-LTA official had copied defence arguments Singapore Ports and planes: The 2 Singapore firms helping to keep the world moving Mr Trump underscored the importance of the US-Philippine military relationship. 'They're a very important nation militarily, and we've had some great drills lately,' he said. US President Donald Trump (left) welcoming Philippine President Ferdinand Marcos Jr to the White House on July 22. PHOTO: REUTERS Mr Marcos, who arrived in Washington on July 20, went to the Pentagon on July 21 for talks with Defence Secretary Pete Hegseth and later met Secretary of State Marco Rubio. During his trip, he will also meet US business leaders investing in the Philippines. Philippine officials say Marcos will stress that Manila must become economically stronger if it is to serve as a truly robust US partner in the Indo-Pacific. Philippine Assistant Foreign Secretary Raquel Solano said last week trade officials have been working with US counterparts seeking to seal a 'mutually acceptable and mutually beneficial' deal. REUTERS
CNA
3 hours ago
- CNA
Trump says may visit China to meet Xi ‘in the not-too-distant future'
WASHINGTON: US President Donald Trump said on Tuesday (Jul 22) that he may travel to China soon for talks with President Xi Jinping, signalling a potential breakthrough amid ongoing trade and geopolitical tensions between the two powers. 'President Xi has invited me to China, and we'll probably be doing that in the not-too-distant future,' Trump told reporters at the White House during a meeting with Philippine President Ferdinand Marcos Jr. 'It's a little bit out, but not too distant,' he added. 'I've been invited by a lot of people, and we'll make those decisions pretty soon.' TRIP POSSIBLY TIED TO ASIA SUMMITS Plans have yet to be finalised, but aides from both countries have discussed the possibility of Trump visiting China as part of a broader trip to Asia later this year, sources familiar with the discussions told Reuters. One option being considered is for the meeting to occur during the Asia-Pacific Economic Cooperation (APEC) summit in South Korea from Oct 30 to Nov 1, or on the sidelines of that event. Another possibility is a trip to Beijing on Sep 3, for a ceremony marking the 80th anniversary of the end of World War II, an event Russian President Vladimir Putin is expected to attend. The White House and Chinese government have declined to comment on earlier reports about the potential meeting. TRADE DEADLINE LOOMS Trump's remark came as he touted his administration's success in 'moving Marcos away from China,' even as he acknowledged it was fine for countries to maintain relations with Beijing. The US president has eased rhetoric in recent weeks and paused new rounds of tariffs, in a bid to stabilise the fraught US-China relationship. But his administration continues to press Beijing over longstanding concerns including overcapacity in manufacturing, regional security, and fentanyl-related exports. Trump has proposed a 10 per cent universal base tariff on all imports and imposed higher rates on specific countries, including a 55 per cent tariff on goods from China. He has set an Aug 12 deadline for the US and China to reach a lasting tariff agreement. POINTS OF FRICTION In addition to trade, US-China relations remain strained over Beijing's support for Russia, imposition of exit bans on some American residents, and growing military assertiveness in the Indo-Pacific.
Straits Times
3 hours ago
- Straits Times
EU leaders brace for frosty China summit as trade frictions bite
Find out what's new on ST website and app. FILE PHOTO: EU and Chinese flags are seen in this illustration taken, March 20, 2025. REUTERS/Dado Ruvic/Illustration/File Photo BEIJING - Expectations are rock-bottom for an EU-China summit on Thursday that will test European resolve and unity as the bloc faces intense trade pressure from both Beijing and the United States, analysts say. European Commission President Ursula von der Leyen and European Council President Antonio Costa plan to press Chinese leaders on rare earths and the war in Ukraine, both areas of tension, during the summit in Beijing. There is little hope for headway, at a time both sides face major challenges sustaining economic growth and Europe struggles to shore up support for Ukraine. The summit was shortened from two days to one due to a "scheduling conflict" raised by Chinese officials, two sources familiar with the planning told Reuters. A business roundtable that was meant to happen on the second day in the city of Hefei will now take place in Beijing, one of the sources said. Both sides may reach a modest joint statement on climate, one of the sources said, but no other tangible achievements are expected. In multiple recent speeches, von der Leyen has revived hawkish China rhetoric, accusing China on July 8 of "enabling Russia's war economy" and flooding global markets with overcapacity. "We know that we don't see eye to eye with China on many issues, but we believe that it is essential to have this kind of very direct and open and constructive conversation," said one EU official. Top stories Swipe. Select. Stay informed. Singapore Two found dead after fire in Toa Payoh flat Singapore Singaporeans aged 21 to 59 can claim $600 SG60 vouchers from July 22 Singapore Singaporeans continue to hold world's most powerful passport in latest ranking Singapore Singapore, Vietnam agree to step up defence ties, dialogue between leaders Asia Malaysia govt's reform pledge tested as DAP chief bows over unresolved 2009 death of political aide Tech Singapore to increase pool of early adopters in AI to complement data scientists, engineers Singapore Prosecution says judge who acquitted duo of bribing ex-LTA official had copied defence arguments Singapore Ports and planes: The 2 Singapore firms helping to keep the world moving The official and the sources declined to be identified as they were not authorised to speak to media. A spokesperson for the European Commission referred to a statement announcing the summit, which said leaders would discuss ways of ensuring "a more balanced, reciprocal and mutually beneficial trade relationship". In response to Reuters' questions, the Chinese foreign ministry referred to a spokesperson's statement on Monday. "Some people in Europe continue to ... exaggerate specific economic and trade issues and make groundless accusations against China on the Ukraine issue, causing unnecessary interference to China-EU relations," its spokesperson said. RISING TENSIONS The 27-member European Union has also been negotiating hard with Washington after U.S. President Donald Trump threatened 30% tariffs on most EU exports from Aug. 1, with prospects for a broader trade deal fading. At the Beijing summit, China hopes to press the EU for a solution to its tariffs on China-built electric vehicles, for which Beijing claims price commitment negotiations are in the "final stages". But European officials say there has been little progress for months. Last week, China threatened to respond to EU sanctions on two Chinese banks and five firms over the Ukraine war. Its commerce ministry said on Monday the sanctions "seriously harmed trade, economic and financial ties". Other trade disputes are simmering in the background. China retaliated against EU restrictions on medical device procurement with its own curbs on July 6, and slapped duties on French cognac producers. China's exports to the EU grew in May while its U.S. exports plunged 34.5% in value terms the same month, sparking fears Chinese trade overcapacity is being diverted to the bloc due to U.S. tariffs on Chinese goods. There is also a growing sense that EU firms are collateral damage for China's rare earth export controls that primarily targeted Washington but have disrupted European defence and automotive supply chains. In return for concessions on rare earths, China's asks could include reviving a long-stalled investment agreement after Beijing lifted sanctions on European Parliament members in May, and pushing back on U.S. export curbs on Dutch firm ASML's chipmaking equipment. China has raised both in the weeks leading up to the summit, two sources familiar with the matter said. 'GLOVES OFF' "The mood is extremely pessimistic in Europe regarding the summit," said Mathieu Duchatel, a director at the Institut Montaigne think tank in Paris, adding that Washington rejected previous EU proposals for coordination on China policy. "There is a sense that the gloves are completely off on the Chinese side ... They sense the transatlantic relationship has weakened and are trying to seize the opportunity." Diplomats and analysts also say that China is growing increasingly frustrated behind closed doors with European officials' repeated insistence on the war in Ukraine, which Beijing views as an obstacle in the relationship. There is little space for constructive dialogue on this, another EU official admitted, with Chinese counterparts denying evidence of Chinese firms' involvement in supplying dual-use goods to Russia. Meanwhile, China believes Europe will cave in to U.S. tariff pressure, said a diplomat familiar with Chinese official thinking. Beijing succeeded in getting Trump to lower crushing 145% tariffs during talks in May and scored a further win when Washington agreed to resume Nvidia H20 AI chip exports, leaving it in a relatively strong position. "This will be the latest in a long list of EU-China summits that have delivered next to nothing," said Noah Barkin, senior advisor at Rhodium Group's China practice. "It is a sign that the economic and security problems in the relationship have become so deep-seated as to be irreconcilable." REUTERS
