Non-oil exports grow at slower pace in April

Singapore's non-oil domestic exports (Nodx) expanded at a slower pace last month, with growth supported by non-electronics such as petrochemicals and specialised machinery.

Shipments grew 6 per cent year on year last month, continuing the positive growth trend seen since December, according to data released by Enterprise Singapore (ESG) yesterday.

But last month's export growth was lower than the revised 11.9 per cent expansion recorded in March, and below the 11.5 per cent growth forecast by analysts polled by Bloomberg.

On a month-on-month seasonally adjusted basis, exports declined 8.8 per cent from March.

Analysts said the continued, albeit slower, Nodx expansion reflects a pause as the industry consolidates, but the trend towards economic recovery persists.

JP Morgan analyst Ong Sin Beng said trade should continue its upward trajectory: "Given the expected recovery in the rest of the world, the view remains that the underlying recovery in goods demand should continue, though mixed in with periodic volatility."

Key electronics exports rose 10.9 per cent year on year last month, compared with the 24.4 per cent rise the previous month. This was driven by higher demand for items such as diodes and transistors.

Meanwhile, non-electronic Nodx grew 4.7 per cent, following the previous month's 9.2 per cent increase, with primary chemicals, petrochemicals and specialised machinery the biggest drivers.

A pullback in the usually volatile pharmaceutical shipments weighed on last month's Nodx growth, but underlying export momentum remains solid, said Barclays regional economist Brian Tan.

The rise in specialised machinery shipments looks to be driven by machinery used for manufacturing electronics and semiconductors, which reflects manufacturers' efforts to alleviate shortages in the segment, he added.

Shipments to Singapore's top 10 markets as a whole declined last month due to dips in exports to the United States, the European Union and Japan.

However, Nodx to China, Malaysia, Hong Kong, South Korea and Thailand rose.

Exports to emerging markets saw a 70.5 per cent jump, continuing the growth from the previous month, due to higher shipments to South Asia and other regions.

UOB economist Barnabas Gan said the expansion in Nodx to key trading partners suggests that "trade demand in the region as a whole has continued to stay buoyant, a remarkable feat despite the rise in Covid-19 infections in several economies".

He noted that Singapore's recent heightened Covid-19 measures will likely have little impact on its external environment, given that businesses will be allowed to operate during this period, compared with the circuit breaker last year when only essential services were permitted to stay open.

But downside risks remain, said OCBC Bank head of treasury research and strategy Selena Ling.

"With Nodx having expanded 6.4 per cent year on year in the first four months of 2021, there is a risk that Nodx momentum may moderate further in the coming months due to the global Covid-19 situation and the tightening of restriction measures both globally and domestically," she said.

The ESG data showed total trade surged 26.3 per cent year on year last month to $95.8 billion.

However, on a month-on-month seasonally adjusted basis, total trade declined 2.6 per cent last month, reversing the 7.1 per cent rise seen in March, when total trade reached $98.4 billion.

Oil shipments rose 63.8 per cent year on year, from a low base a year ago. But in terms of volume, oil exports contracted 20.6 per cent last month, following the 23.5 per cent decline seen in March.