SINGAPORE – Singapore’s key exports declined less sharply in February on a yearly basis, but economists said there was little reason to cheer.

External demand is unlikely to pick up any time soon as bank turmoil in the United States and Europe could lead to a more cautious approach to lending. Tightening financial conditions will also weigh further on the global economy, which is already facing the spectre of recession.

Non-oil domestic exports (Nodx) in February shrank 15.6 per cent from a year ago, after falling 25 per cent in January and 20.6 per cent in December, data from Enterprise Singapore (EnterpriseSG) on Friday showed.

It marks the fifth straight month of year-on-year decline of Singapore’s key exports as both electronic and non-electronic shipments fell.

ANZ head of Asia research Khoon Goh noted that the timing of Chinese New Year had exaggerated the January weakness. He said goods exports remained very weak, with “Nodx now at its lowest levels since June 2019”.

On a month-on-month, seasonally adjusted basis, Nodx fell by a hefty 8 per cent to $13.3 billion, after the previous month’s 0.9 per cent growth. The drop was worse than the 0.5 per cent forecast in Bloomberg’s poll of analysts.

In real terms – after adjusting for the effect of price changes – Nodx fell by 12.2 per cent in February, better than the corresponding 20.7 per cent fall in January.

Electronic products, which account for around a quarter of domestic exports, contracted another 26.5 per cent in February, a slight improvement from the 26.8 per cent slump in January. Integrated circuits, disk media products and capacitors contributed the most to the fall in electronic shipments.

Maybank Securities economists Chua Hak Bin and Lee Ju Ye said in a report that electronic shipments will likely remain weak as the global growth downturn continues to weigh on demand. As an indication of the broad weakness in electronics, exports of chip powerhouses such as South Korea and Taiwan also underperformed in the first two months of the year, they added.

Non-electronic products shrank less sharply in February, slipping 12.1 per cent after contracting 24.5 per cent in January. Structures of ships and boats, petrochemicals and pharmaceuticals contributed the most to the decline.

Breaking down by export markets, shipments to Singapore’s top 10 markets declined as a whole in February. The falls were led by double-digit drops in exports to the European Union, Hong Kong and Taiwan.

In particular, shipments to the EU reversed the previous month’s gains to fall 34.2 per cent year on year, due mainly to falls in exports of pharmaceuticals, petrochemicals and disk media products.

Intra-regional trade improved slightly as shipments to Thailand rebounded, and shipments to Indonesia and Malaysia did not contract as badly as in January.