Non-oil exports up 3% despite Covid-19, beating forecasts

Non-oil domestic exports to the Singapore's top markets mostly increased, other than for China and Hong Kong.
Non-oil domestic exports to the Singapore's top markets mostly increased, other than for China and Hong Kong.PHOTO: ST FILE

Feb shipments to top markets such as EU and US rise, but exports to HK and China dip

Non-oil domestic exports (Nodx) defied the coronavirus crisis by expanding 3 per cent in February over the same month last year.

The robust number beat expectations by economists polled by Bloomberg who had forecast a 4.6 per cent decline after shipments shrank 3.3 per cent in January.

But Nodx slid 4.8 per cent from January to last month on a seasonally adjusted basis.

SIM Global Education senior lecturer Tan Khay Boon said the month-on-month decline shows demand for Singapore's exports was still weak. Dr Tan said: "The improvement in (last month's year-on-year figures) was a more technical one due to the low base in 2019.

"With more and more countries enforcing a lockdown, external trade is bound to weaken with weaknesses in both demand and supply."

Barclays economist Brian Tan said: "Beyond the expected favourable base effect from the Lunar New Year holiday this year, the (month-on-month) decline was also milder than we had anticipated."

Exports of electronics grew by 2.5 per cent in February from the same month a year earlier, while shipments of non-electronics expanded 3.2 per cent, noted Enterprise Singapore yesterday.

Parts of integrated circuits, capacitors and disk media products led the export growth in electronics.

Integrated circuit shipments grew 130.9 per cent, capacitors increased 128.8 per cent, and disk media products were up 57.4 per cent.

Electronic exports had fallen 13 per cent year on year in January.

The best performers among non-electronic exports last month were specialised machinery, non-electric engines and motors, and pharmaceuticals.

Specialised machinery shipments rose 74.1 per cent while non-electric engines and motors increased 37.3 per cent and pharmaceuticals were up 23.7 per cent.

Non-electronic exports had fallen 0.1 per cent in January.

Nodx to Singapore's top markets mostly increased, other than for China and Hong Kong.

EFFECT OF VIRUS OUTBREAK

The external weak demand will continue to persist until Covid-19 is well within control.

DR TAN KHAY BOON, SIM Global Education senior lecturer.

Shipments to the European Union bloc, including Britain, grew 43 per cent year on year and were up 23.5 per cent to the United States.

Exports to Japan grew the most, ahead 61.7 per cent last month.

There were two weak spots.

Exports to China fell 35.8 per cent - the lowest in four years - while Hong Kong was down 29.2 per cent, the 10th straight month of decline.

Maybank Kim Eng economists Chua Hak Bin and Lee Ju Ye said: "Despite the positive headline number, Nodx to China plunged due to closure of ports as part of the (Covid-19) lockdown."

Dr Tan added: "Some amount of depreciation in the Singapore dollar may help to boost exports, but the external weak demand will continue to persist until Covid-19 is well within control."

Dr Chua and Ms Lee concurred, saying: "We doubt that February's better-than-expected numbers will extend into March.

"The rapid spread of the virus outbreak in Europe and US will likely hurt global demand. The recent spike in Covid-19 cases in neighbouring countries, including Malaysia, Indonesia and Thailand, is triggering more drastic government measures and will dampen regional trade."

A version of this article appeared in the print edition of The Straits Times on March 18, 2020, with the headline 'Non-oil exports up 3% despite Covid-19, beating forecasts'. Print Edition | Subscribe