Demand for 'Made in Singapore' goods likely to remain lacklustre

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http://www.todayonline.com/business/july-exports-fall-third-month-restructuring-reshapes-industries

Local exports fell for the third consecutive month after a contraction in the non-electronics sectors added to the persistent weakness seen in the shipment of electronics.

This further signals that demand for goods made in Singapore is likely to remain lacklustre throughout the rest of the year.

Data released by International Enterprise (IE) Singapore yesterday showed non-oil domestic exports (NODX) fell by 3.3 per cent on-year last month.

This follows June’s 4.6 per cent decline, as shipments to all major markets (except the United States, the eurozone, China and Taiwan) declined.

These figures are not surprising after IE Singapore adjusted downward its full-year NODX forecast to a decline of 1 to 2 per cent just last week, UOB economist Francis Tan said.

The prolonged weakness in electronics exports should not be a surprise given that production in the industry is slowing, giving way to more services activities amid Singapore’s ongoing economic restructuring, the Ministry of Trade and Industry said in its second-quarter economic survey last week.

In this process, the economy must continue to endure short-term pains, UOB’s Mr Tan added.

“We may continue to see production and exports of certain products struggling. But if we’re successful in steering industries towards restructuring, the end result is, hopefully, that we will become like Switzerland, drawing foreign investments with high-value activities,” he said.

Meanwhile, Singapore’s non-electronics NODX contracted by 1.1 per cent after June’s 1.3 per cent rise, reflecting the volatile nature of pharmaceutical and offshore marine engineering exports.