The value of Singapore's non-oil domestic exports fell 15.6 percent on the year in February after dropping 25.0 percent in January and fell 8.0 percent on the month after an increase of 0.9 percent previously. Imports fell 4.5 percent on the year in February after dropping 11.3 percent in January and dropped 7.2 percent on the month after decreasing 1.1 percent previously. These large month-over-month declines in trade flows partly reflects the timing of lunar new year holidays. Previously published PMI survey data showed a modest contraction in the aggregate economy in February.

Weakness in exports was broad-based across categories in February. Exports of electronics products fell 26.5 percent after dropping 26.8 percent previously, while exports of non-electronic products declined 12.1 percent after falling 24.5 percent previously. Export performance was mixed, however, across major trading partners. Exports to the United States rebounded after a sharp fall in January, exports to Japan grew at a stronger pace, and exports to China fell at a less pronounced rate. Exports to Hong Kong, however, recorded another large drop, exports to Taiwan declined at a faster pace, and exports to the European Union fell very sharply after increasing on the year the previous month.

Singapore publishes monthly data (both in nominal and real terms) for the current and previous two months, cumulative-to-date data on imports and exports by country of origin and destination, as well as monthly seasonally adjusted trade data. Imports refer to goods brought into Singapore irrespective of whether they are for consumption, for processing, for use in manufacturing, or for subsequent re-shipment to other countries/areas. Exports refer to goods brought out of Singapore. They comprise domestic exports and re-exports. Data are also disseminated on imports broken down by country of origin and domestic exports and re-exports broken down by country of destination.

Changes in the level of imports and exports, along with the difference between the two (the trade balance) are a valuable gauge of economic trends here and abroad. While these trade figures can directly impact all financial markets, they also affect currency values in foreign exchange markets. However, the foreign exchange impact is muted here given that Singapore’s currency is managed by the central bank.

Imports indicate demand for foreign goods and services in the local economy. Exports show the demand for local goods in countries overseas. Movements in the trade balance directly affect GDP growth because of the Singapore’s dependence on trade. Stronger exports are bullish for corporate earnings and the stock market. The bond market is also sensitive to the risk of importing inflation.

This report also gives a breakdown of trade with major countries as well, so it can be instructive for investors who are interested in diversifying globally. For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country.