Singapore exports see slower 6% growth in April; analysts say still on recovery track

Shipments grew 6 per cent year on year last month.
Shipments grew 6 per cent year on year last month.ST PHOTO: GAVIN FOO

SINGAPORE - Singapore's non-oil domestic exports (Nodx) expanded at a slower pace in April, 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 since December, according to data released by Enterprise Singapore (ESG) on Monday (May 17). 

But April’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 that the trend towards economic recovery persists.

JP Morgan analyst Ong Sin Beng noted that trade should continue its upward trajectory in 2021: “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 for April, compared with the 24.4 per cent expansion the previous month. This was driven by growth in 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 April’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 machines and apparatus 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 in April, due to dips in exports to the United States, European Union and Japan, from smaller shipments of non-monetary gold, pharmaceuticals and disk media products. 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 encouraging growth from the previous month, due to higher shipments to South Asia and other regions. 

UOB economist Barnabas Gan said that 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 in 2020 where only essential services were allowed to stay open. 

But downside risks remain, given the dynamic virus situation globally, noted OCBC 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 in April to $95.8 billion, continuing the 19.6 per cent expansion recorded in March. Total exports saw a rise of 26.6 per cent, while total imports grew 25.9 per cent.

However, on a month-on-month seasonally adjusted basis, total trade declined 2.6 per cent in April, 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, on the back of higher exports to the likes of Malaysia, Indonesia and China. But in terms of volume, oil exports contracted 20.6 per cent in April, following the 23.5 per cent decline seen in March.