SINGAPORE — Shipment of goods produced in Singapore continued to slump in June, with exports of electronics clocking its 23rd month of decline to offset gains in the non-electronics segment, adding to concerns that economic restructuring may be curbing growth.

Analysts are warning that a full-year contraction in exports could be inevitable, considering that shipments in the first half of the year were underwhelming.

Non-oil domestic exports (NODX) fell by 4.6 per cent on-year last month, extending a 6.6 per cent decline in May, the latest data by the International Enterprise (IE) Singapore showed. NODX to all of the Republic’s top 10 markets — except Malaysia, Indonesia, China and Taiwan — fell last month.

The figures mean that NODX is now down by 2.2 per cent on-year for the January to June period, OCBC economist Selena Ling said.

“Currently, the Singapore export plane is flying with only one engine, namely the non-electronics, working at this juncture. The longer the turnaround in the electronics sector takes, the more likely that full-year NODX growth will undershoot the official 2014 NODX growth forecast of 1 to 3 per cent on-year,” she said, adding that OCBC is forecasting a 1.5 per cent decline for the entire year. Singapore’s NODX fell by 6 per cent last year.

Electronics is the bedrock of Singapore’s manufacturing industry, contributing 5.2 per cent to economic growth in 2012, but the sector has been lagging for the past two years, troubled by a general global slowdown.

“Once again, the drag came from the decrease in electronic exports, which dropped on-year by 17.4 per cent. That was the 23rd straight month of decline, largely due to decrease in (exports of) integrated chips and parts of personal computers,” said CIMB economist Song Seng Wun. He is forecasting that full-year NODX could come in between a 1 per cent decline and a 1 per cent growth.

In a sign of optimism, Mr Song noted that external demand is showing positive signs of recovery, with industry tracker Gartner raising its forecast for 2014’s global chip sales to 6.7 per cent from its previous 5.4 per cent prediction.

“The electronics sector is going through a trough now. Once the recovery in external demand becomes more broad-based, we should see that reflected in our tech exports, hopefully in 2015 and beyond,” Mr Song said. “Before that, the soft tech exports will remain a drag for our outlook in the second half, and we can only look forward to non-tech sectors — particularly pharmaceuticals and petrochemicals — to offset that weakness.”

Last month, pharmaceutical and petrochemical exports grew by 24.3 per cent and 29 per cent on-year. These combined to push non-electronics NODX to a 1.3 per cent growth, improving from a 2.4 per cent drop in May.

Meanwhile, non-oil re-exports (NORX) — the exporting of goods that were imported to Singapore — rose 7.5 per cent last month, reversing May’s 4.7 per cent contraction. Barring May’s decline, NORX has remained in positive territory for 14 months.

“The fact that NORX remains solid suggests that demand, particularly from the G3 markets (the United States, European Union and Japan), is improving,” ANZ economist Daniel Wilson said. “However, as economic restructuring continues, domestic constraints are limiting the multiplication effect of that recovery for Singapore.”

Mr Wilson’s comment echoed concerns of some analysts who have cautioned that economic restructuring might be curbing GDP growth, after Singapore’s economic growth came in at a disappointing 2.1 per cent in the second-quarter.

“In this environment, manufacturers will need to either increase productivity, cut profit margin, shift production or simply shut down,” he said.

“But I don’t think Singapore is losing its competitiveness ... It’s more of a transformation. Once that transformation is complete, we should have a leaner manufacturing platform, which can better respond to demand shock.”