Singapore key export growth slows in February ahead of Iran war fallout, threat of higher US tariffs
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Electronics shipments continued to see strong growth. In February alone, electronics exports jumped 43.2 per cent from a year earlier.
PHOTO: LIANHE ZAOBAO
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- Singapore's exports grew 4% in February, driven by strong electronics demand linked to the AI boom.
- Electronics exports surged 43.2%, led by disk media and integrated circuits, but non-electronics declined by 6.9%.
- Trade probes by the US and the Iran war pose uncertainty, potentially disrupting supply chains.
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SINGAPORE – Singapore’s key exports saw slower growth in February, with analysts saying the trade outlook is clouded by sharply higher energy prices and supply chain disruptions from the Iran war, and the threat of higher US tariffs.
Electronics shipments continued to see strong growth on demand powered by the artificial intelligence boom, but exports of non-electronics products fell.
Non-oil domestic exports (NODX) rose 4 per cent, their sixth consecutive month of expansion, after revised 9.2 per cent growth in January, according to figures released by Enterprise Singapore on March 17.
The growth was less than the 5.3 per cent forecast by analysts in a Bloomberg poll.
Smoothing out the impact from the shifting Chinese New Year holidays, NODX grew 6.7 per cent in aggregate over January and February.
In February alone, electronics exports jumped 43.2 per cent from a year earlier. Disk media products expanded the most, at 96.3 per cent, while exports of integrated circuits, or semiconductors, surged 51.2 per cent and PC shipments rose 22.9 per cent.
Meanwhile, non-electronics NODX dropped 6.9 per cent year on year, after a 3.1 per cent decline in January. The declines were seen across food preparations, petrochemicals, and non-monetary gold.
In terms of markets, exports to South Korea, Taiwan and Hong Kong rose the most compared with a year ago, while exports to the US and Indonesia contracted.
Non-electronics exports to the US slumped 59.2 per cent from a year ago, while electronics exports to the country climbed by almost 95 per cent.
Non-oil re-exports continued to rise in February by 21.9 per cent year on year.
This was particularly driven by electronics and a 454.3 per cent surge in the re-exports of PCs, building on a trend seen since 2025.
DBS Bank senior economist Chua Han Teng said the superior performance of electronics exports, relative to non-electronics exports, reflects “continued strength from global AI-related tailwinds”.
“Singapore continues to benefit indirectly from the global AI boom, with robust electronics domestic export growth to key upstream players in the AI supply chain,” he said.
“In contrast, NODX to the US declined for the third straight month, likely reflecting the ongoing headwinds from US tariffs.”
Enterprise Singapore had raised its forecast for key exports in February – before the strikes on Iran – in response to an improved global economic outlook, fuelled by AI demand. It saw NODX growing 2 per cent to 4 per cent in 2026, up from a previous forecast of 0 per cent to 2 per cent.
Oxford Economics senior economist Sheana Yue said the January and February NODX readings suggest that key exports began 2026 with a “strong momentum”.
However, she said soaring oil and gas prices from the Iran war pose a risk to exports in the months ahead.
The Middle East conflict has effectively closed the Strait of Hormuz, which typically handles a fifth of the world’s oil supplies, placing upward pressure on energy prices.
Foreign tankers have been attacked in the waterway, and Iran’s main oil export hub has been hit by US strikes, with no end to the conflict in sight.
The price of Brent crude, the global oil benchmark, briefly surged to US$119.50 a barrel on March 9, its highest level since the Ukraine crisis in 2022.
Prices have eased but are still above the US$100 mark, compared with around US$71 before the conflict.
Ms Yue said a sustained rise in oil prices could push up global energy costs and compress real incomes, weighing on consumption.
She estimates that global gross domestic product could decline by around 0.7 per cent in 2026, if oil prices averaged around US$140 for two consecutive months.
“While electronics exports should remain supported by AI-related demand, Singapore’s export momentum may prove difficult to sustain if elevated energy prices weigh on global consumption and investment,” she said.
Mr Chua noted that the escalation of the Middle East conflict could also disrupt supplies that are important for electronics production, such as helium, for which Qatar is a major supplier.
He noted that “trade policy uncertainty has also resurfaced, as the Trump administration explores alternative avenues for trade restrictions”.
The US on March 11 launched a trade probe on Singapore and 15 other trading partners for excess manufacturing, which could allow the Trump administration to impose tariffs as high as 100 per cent or more on specific goods.
It announced a second probe on March 12 into 60 economies – including Singapore – over failures to take action on forced labour and whether these have affected US workers and businesses.
Singapore goods headed to the US are currently subject to a 10 per cent tariff, with some exemptions such as pharmaceuticals and semiconductors.
