Singapore non-oil domestic exports rise at slower pace of 12.7% in July, still beating forecasts

Last month's year-on-year shipments beat the 12 per cent increase forecast by analysts polled by Bloomberg.
Last month's year-on-year shipments beat the 12 per cent increase forecast by analysts polled by Bloomberg.PHOTO: AFP

SINGAPORE - Singapore's non-oil domestic exports (Nodx) rose last month at a better than expected pace, aided by electronic and non-electronic shipments such as specialised machinery, pharmaceuticals and petrochemicals.

Nodx expanded 12.7 per cent last month from a year ago, after a 15.9 per cent surge in June. This extends the positive growth trend seen since December last year, according to data released by government agency Enterprise Singapore (ESG) on Tuesday (Aug 17).

Last month's year-on-year shipments beat the 12 per cent increase forecast by analysts polled by Bloomberg.

However, on a month-on-month seasonally adjusted basis, Nodx dipped by 0.9 per cent last month, after June's 6 per cent gain. The Bloomberg survey had tipped a decline of 1.7 per cent.

Electronic exports, on a year-on-year basis, expanded by 15 per cent last month, following the 25.5 per cent growth in June.

The gain in electronics was led by personal computers, whose exports rose 83.2 per cent. Shipment of integrated circuits increased by 11.1 per cent, while export of diodes and transistors was up by 29.7 per cent.

Shipments of non-electronic products grew by 12.1 per cent last month, following a 13.2 per cent rise in June.

Specialised machinery shipments were up 56.8 per cent, pharmaceuticals 48.3 per cent and petrochemicals rose 49.4 per cent, contributing the most to the growth in non-electronic Nodx.

ESG said specialised machinery export rose in line with robust global semiconductor demand, while pharmaceuticals grew from a low base a year ago. Meanwhile, petrochemicals extended their gain last month after declining amid a global downcycle in the year earlier period.

Nodx to the top markets as a whole rose last month, though shipments to the United States declined. The largest contributors to the rise in last month's Nodx were China, up 58.5 per cent, the European Union (61.5 per cent) and Taiwan (37 per cent).

Eight months of straight gains in exports on an annual basis backed ESG’s recent upgrade of full year export performance.

The agency on Aug 11 said it now expects Nodx to grow by 7 per cent to 8 per cent year on year in 2021, up from the projection of 1 per cent to 3 per cent issued in May. That was the third upgrade this year.

Singapore also expects its economy to grow at a faster pace than previously predicted as vaccinations gain pace, allowing for more economic activity and boosting demand for goods and services at home and in some of its key markets abroad.

The Ministry of Trade and Industry on Aug 11 upgraded its gross domestic product growth forecast range for the year to 6 per cent to 7 per cent.

The new prediction compares with the previous full-year forecast of 4 per cent to 6 per cent, made first in November last year, and comes after Singapore began easing some of its Covid-19-related curbs this week and vaccination coverage topped above 70 per cent of the population.

Maybank Kim Eng economist Dr Chua Hak Bin, said he would maintain his Nodx growth forecast at 9 per cent for 2021, as exports in the second half of the year will be supported by resilient demand for chips and related equipment.

Meanwhile, non-electronics such as petrochemicals will continue to rise from last year’s low base, he said.

However, Dr Chua warned of the downside risks to Singapore trade given the Delta variant continues to force lockdowns in some parts of Asia, including China and the Asean region.