Decline in Singapore exports, decline in US leading index won't help

The International Enterprise Singapore has reported that Singapore's non-oil domestic exports (NODX) decreased by 0.6 percent in January on a month-on-month seasonally-adjusted basis, following a revised 0.2 percent rise in December. In terms of level, it registered $10.9 billion. On a year-on-year basis, NODX growth was 9.0 percent, following the 16.5 percent and 8.0 percent gain in November and December respectively.

Non-oil retained imports of intermediate goods, a short term leading indicator of overall manufacturing activities in the months ahead, posted an 8.8 percent rise on a month-on-month seasonally-adjusted basis in January, reversing the revised 3.7 percent contraction in December 2004.

Domestic exports of electronics showed a clear deceleration, rising only 5.9 percent last month from a year earlier, after an 8.3 percent growth in the preceding month. The slack was compensated by non-electronic products, which grew 12.4 percent in last month, thanks to strong exports of petrochemicals, electrical machinery and raw chemicals.

Singapore's external sector may not be in for an acceleration any time soon. The US economy, its main destination for exports, does not appear poised to accelerate, based on the latest news.

The Conference Board's leading index declined 0.3 percent in January. This follows increases in the previous two months, though, so the longer trend is flat rather than down. The leading index now stands at 115.6. Based on revised data, this index increased 0.3 percent in December and increased 0.3 percent in November. During the six-month span through January, the leading index decreased 0.3 percent, with five out of ten components advancing.