Singapore's trade got off to a strong start in 2018, with growth in non-electronics exports more than making up for the second straight month of decline in electronics.
Non-oil domestic exports (Nodx) rose 13 per cent year-on-year in January, data by trade agency International Enterprise Singapore showed yesterday.
This was up from a 3.1 per cent rise in December, and far outpaced economists' estimates of 8.9 per cent growth.
But economists still expect Nodx growth to moderate this year, after last year's brisk pace of 8.8 per cent.
Last month's year-on-year growth was due to a 20.7 per cent spike in non-electronics Nodx - the eighth straight month of growth - after a 6.8 per cent rise in December. This more than made up for a continued slide in electronics Nodx, which fell 3.9 per cent last month, after a 5.3 per cent fall in December.
The current cyclical slowdown in Asia-Pacific semiconductor sales data - which peaked in April last year-does not bode too well for Singapore's electronics exports, said UOB economist Francis Tan.
Non-oil domestic exports to eight of the top 10 markets grew last month, with the exceptions being Taiwan and Thailand.
Growth was led by the United States (up 53.4 per cent), the euro zone (up 16.9 per cent) and Japan (up 28.8 per cent).
Continuum Economics' chief economist for Asia Jeff Ng said: "Nodx growth looks to remain supported by the upswing in global demand."
He noted that this was the fourth consecutive month in which Nodx to the US and the euro zone had climbed by double digits.
UOB's Mr Tan noted, however, that a slowdown in China's factory activities pointed to slowing export growth for Singapore in the coming months.
Though still positive that Nodx will continue to grow, driven by semiconductor exports, he added: "We have already seen signs that the strong double-digit growth exhibited since November 2016 is not sustainable over the next few months."
UOB is maintaining its forecast of 6.5 per cent Nodx growth this year. IE Singapore's estimate is between 1 per cent and 3 per cent.
Maybank Kim Eng economists Chua Hak Bin and Lee Ju Ye similarly expect trade growth to soften this year, "especially as electronics exports are expected to weaken given the high base from last year".
Non-oil re-exports, a proxy for wholesale trade services, also did well last month, rebounding with growth of 4.9 per cent after having declined 7 per cent in December. This was on the back of both non-electronics (up 8.3 per cent) and electronics (up 1.8 per cent).