Nodx grew 4.3% last year

Singapore's non-oil domestic exports (Nodx) benefited from higher shipments of electronic and non-electronic products last year, posting modest growth, amid uncertainty in the global economy.

Nodx expanded 4.3 per cent on a year-on-year basis last year, reversing the 9.2 per cent decline recorded in 2019, government agency Enterprise Singapore (ESG) noted in its trade performance review yesterday.

Last year, total merchandise trade slipped 5.2 per cent year on year to $969 billion, after a 3.2 per cent dip the year before, with both exports and imports falling. This weakening in overall merchandise trade was mainly due to the contraction in oil trade by 31 per cent last year, with lower oil prices, continuing the 13.9 per cent slide in 2019.

On a year-on-year basis, Singapore's overall trade shrank 5.1 per cent in the fourth quarter, with the contraction in the oil trade outweighing the rise in non-oil trade.

The expansion in both electronic and non-electronic Nodx was supported by growth in exports of electronic products such as disc media products and telecommunications equipment, as well as non-electronic items like non-monetary gold and pharmaceuticals.

Non-oil exports to most of Singapore's top markets grew last year, with the United States, Japan and South Korea the biggest contributors to this increase.

Meanwhile, total services trade fell 14.3 per cent last year to $497.1 billion, after the 5.7 per cent expansion seen the previous year. Both services exports and imports decreased over the year for reasons such as lower receipts from travel and transport.

For the fourth quarter, total services trade contracted 16.3 per cent on a year-on-year basis.

ESG upgraded its overall merchandise trade forecast to 2 per cent to 4 per cent growth for the whole of this year, up from the 1 per cent to 3 per cent tipped in November last year. This was on the back of higher expected oil prices which could support oil and total trade.

The Nodx forecast was held at between 0 per cent and 2 per cent expansion, given continued risks and uncertainties in the global economy, it added.

Maybank Kim Eng senior economist Chua Hak Bin suggested that Nodx could see greater expansion than what ESG has predicted.

"Strong demand for semiconductors, which account for 11 per cent of Nodx, and a recovery in non-electronics such as petrochemicals, which plunged last year, will likely support export growth," he said, adding that positive Nodx growth is in line with the Ministry of Trade and Industry's positive manufacturing outlook.

Ms Selena Ling, head of treasury research and strategy at OCBC Bank, noted that the upgraded merchandise trade forecast is partial normalisation given the low base from last year's decline.

"For Singapore, as a trading and export hub, the pace of vaccine-fuelled recovery in global demand and trade is key," she said.