Singapore non-oil export growth slows to 2.7% in August, below forecasts

Electronic exports expanded 16.7 per cent year on year last month.
Electronic exports expanded 16.7 per cent year on year last month.ST PHOTO: GAVIN FOO

SINGAPORE - Singapore’s non-oil domestic exports (Nodx) expanded at a much slower pace last month, with a drop in non-electronics shipments though electronics exports remained robust.

Key shipments grew 2.7 per cent year on year, easing from July’s 12.7 per cent expansion and reflecting the high base a year ago. This fell short of the 8.5 per cent growth forecast by analysts in a Bloomberg poll, even as Nodx recorded a ninth straight month of expansion.

On a month-on-month seasonally adjusted basis, Nodx declined 3.6 per cent last month, extending the 0.9 per cent dip seen in July, according to data released by Enterprise Singapore (ESG) on Friday (Sept 17).

Electronic exports expanded 16.7 per cent year on year last month, driven primarily by integrated circuits as well as diodes and transistors amid robust global semiconductor demand.

But non-electronic Nodx declined 1.4 per cent, reversing the previous month's 12 per cent rise. This was largely due to a plunge in non-monetary gold (-66.4 per cent), food preparations (-27.1 per cent) and pharmaceuticals (-12.4 per cent).

ESG noted that non-monetary gold Nodx declined from a high base a year ago, in part reflecting the higher gold prices in August last year.

Barclays analyst Brian Tan said in a research note that excluding the pharmaceuticals and non-monetary gold export segments, which tend to be volatile, Nodx was broadly stable. 

Excluding these two segments, non-electronic exports are estimated to have fallen about 4 per cent in August on a month-on-month seasonally adjusted basis, he said. This dip likely reflected a sharp pullback in exports of specialised machinery, which has surged in July, Mr Tan added.

Maybank Kim Eng analysts Chua Hak Bin and Lee Ju Ye said that resilient demand for chips and related electronics equipment will provide support for Nodx growth for the year. 

“However, downside risks remain with China’s slowdown and tight freight capacity. Global container-freight rates are already four times higher than a year ago and have yet to peak,” they cautioned. 

UOB economist Barnabas Gan added: “We believe that Singapore’s external-facing industries will benefit from the continued recovery of the global trade wind, while higher commodity prices may provide the fillip to overall export value ahead.” 

But the recent underperformance of Singapore’s key trading partners such as China could have affected the Republic’s export momentum, although overall demand in the region remained buoyant, he said. 

Nodx to the top markets rose overall last month, although shipments to China and the European Union saw a dip. Exports to Taiwan, Hong Kong and Malaysia were the largest contributors to the rise.

Key shipments to emerging markets also saw a 2.6 per cent uptick last month, after the 59.8 per cent jump in July.

Year on year, oil domestic exports expanded 56.4 per cent last month off a low base a year ago, on the back of higher exports to Australia, Malaysia and Indonesia.

Total trade grew 19.8 per cent year on year in August, extending the 19 per cent growth in July.

Total exports rose 17.4 per cent, while imports expanded 22.8 per cent.

ESG said last month that it expects Nodx to grow 7 per cent to 8 per cent year on year this year, up from the previous forecast of 1 per cent to 3 per cent issued in May.