S’pore key exports see surprise 3.5% drop in May as shipments to US plunge

SINGAPORE - Singapore’s trade outlook has darkened with key exports suffering a surprise drop in May, led by a 20.6 per cent plunge in shipments to the United States.

Analysts said this suggests that the front-loading of orders that propped up exports in April has cooled, and the trade outlook remains rife with tariff uncertainty.

Total non-oil domestic exports (Nodx) slid 3.5 per cent year on year, reversing a 12.4 per cent rise in April, data from Enterprise Singapore (EnterpriseSG) on June 17 showed.

While electronics exports grew in May, non-electronics shipments declined.

Analysts polled by Reuters had forecast May key exports to rise by 8 per cent. Expectations were that the front-loading of export orders would continue while

a 90-day tariff truce

with the Trump administration lasted.

RHB group chief economist Barnabas Gan said: “Despite the 90-day tariff pause, a further slowdown is expected in the coming months as global demand eases and (because of) weakening consumer spending ahead of heavier US tariffs taking effect in the second half of 2025.”

He added that the ongoing uncertainty may continue to pressure Singapore’s trade performance in the months ahead, particularly once the tariff pause expires on July 8.

“In addition, slowing growth in major economies and intensifying trade frictions also present significant downside risks to the city-state’s trade and economic outlook, reinforcing a more cautious stance on the manufacturing sector,” he said, forecasting Nodx to remain flat in 2025.

Oxford Economics analyst Sheana Yue said May’s numbers reflect a normalisation after April’s strong export performance.

“We anticipate export resilience will continue to moderate, although a collapse in shipments this year is unlikely,” she said.

In May, EnterpriseSG said it expects growth in key exports to come in at the lower end of its 1 per cent to 3 per cent forecast for 2025 due to developments regarding trade and tariffs.

The US announced a 90-day suspension of global reciprocal tariffs, excluding China, on April 9. The same reprieve was extended to electronics on April 12.

The US and China subsequently announced on May 12 a deal to slash tariffs, which also lasts 90 days.

This saw tariffs on US exports to China cut to 10 per cent from 125 per cent, while duties on Chinese exports to the US were lowered to 30 per cent from 145 per cent.

Trade and Industry Minister Gan Kim Yong said in May that the US was not going to budge on its baseline 10 per cent tariff on Singapore exports, but the Government was still negotiating for concessions on pharmaceuticals that US President Donald Trump has also threatened to impose levies on.

Pharmaceutical shipments make up more than 10 per cent of the Republic’s exports to the US.

For the first five months of 2025, key exports grew by 3.7 per cent, extending the 2.4 per cent expansion recorded in the last quarter of 2024.

But UOB associate economist Jester Koh said: “The payback from earlier front-loading could lead to a more protracted downturn in trade activity in the second half of 2025 while escalating geopolitical tensions in the Middle East could further dampen business and consumer confidence.” 

Maybank analysts Chua Hak Bin and Brian Lee added that exports may face some payback and slowdown in the second half, with the magnitude dependent on tariff outcomes for US trading partners after the reciprocal tariff truce.

“In addition, the US could unveil sector tariffs on electronics and pharmaceutical goods, which are currently exempt,” they said.

In May, electronics exports rose 1.7 per cent, moderating from the growth of 23.4 per cent in the previous month. Personal computers grew 50.9 per cent, while integrated circuits, or chips, grew 4.3 per cent. Consumer electronics exports grew 49 per cent.

Non-electronics exports dropped 5.3 per cent in May, after growing 9.3 per cent in the previous month.

Petrochemicals fell 17.8 per cent, while non-monetary gold declined 25.9 per cent. Specialised machinery contracted 11.7 per cent.

Among Singapore’s exports to its top 10 markets, the 20.6 per cent fall in shipments to the US reversed a 1.2 per cent rise in April.

Specialised machinery exports to the US plunged 49.2 per cent, while food preparations dropped 35.7 per cent and miscellaneous manufactured articles fell 41 per cent.

Exports to Thailand also fell, by a smaller 17 per cent, on the back of a drop in personal computers, food preparations and non-monetary gold.

Meanwhile, exports to Malaysia slid 7.6 per cent, also due to non-monetary gold, other computer peripherals and primary chemicals. 

On the other hand, exports to Taiwan, Indonesia, South Korea and Hong Kong grew.

DBS senior economist Chua Han Teng said Singapore’s manufacturing sentiment remains weak, and exporters are vulnerable “to the US tariff roller coaster”.

“Ongoing US tariff uncertainties and global trade frictions that are higher than pre-Trump 2.0... are negative for Singapore’s external demand prospects,” he said.

“Although electronics exports remained in expansion in May, their growth has slowed, and they are susceptible to downside risks from US levies on semiconductor imports that could still be on the cards.”