The value of Singapore's non-oil domestic exports fell 14.7 percent on the year in May after dropping 9.8 percent in April and fell 14.6 percent on the month after advancing 2.6 percent previously. Imports fell 20.7 percent on the year in May after dropping 19.5 percent in April and fell 6.7 percent on the month after a previous decline of 2.4 percent. In contrast to this data showing weakness in trade flows, previously published PMI survey data showed ongoing strength in the aggregate economy in May.

Weakness in exports on a year-over-year basis was broad-based across categories. Exports of electronics products fell 27.2 percent after dropping 23.3 percent previously, while exports of non-electronic products fell 10.7 percent after a previous decline of 5.8 percent. Exports posted mixed performance across major trading partners. Exports to China rebounded after a sharp fall previously, while exports to Japan and Taiwan fell at a less pronounced pace. Exports to the European Union, however, fell sharply after a previous increase, growth in exports to the United States slowed sharply, and exports to Hong Kong fell at a faster pace.

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.