Singapore non-oil exports rise 18.4% in December, capping best year since 2010

For 2022, trade growth is expected to ease from the high base this year, said ESG. ST PHOTO: KUA CHEE SIONG

SINGAPORE - Key exports grew in December for the 13th month in a row, wrapping up 2021 as the best year for shipments since 2010.

Being one of the world’s top hub of global manufacturers of semiconductors and related devices such as integrated circuits, Singapore made the best out of a year when working from home remained the norm and pushed further up the demand for electronic products such as mobile phones and computers.

Demand for pharmaceuticals and rising prices of petrochemicals also helped. 

Analysts said exports growth may slow this year as the high base effect, particularly for electronics exports, kicks in. 

Non-oil domestic exports (Nodx) rose 18.4 per cent year on year last month, according to data released by government agency Enterprise Singapore (ESG) on Monday (Jan 17). The growth was led mainly by non-electronics exports.

The pace of growth was slower than in November when shipments surged 24.2 per cent - the biggest year-on-year rise since February 2012’s 30.3 per cent jump.
Last month’s gain was, however, higher than the median forecast of 13.5 per cent in a Bloomberg poll of economists.

Also, on a seasonally adjusted month-on-month basis, Nodx rose 3.7 per cent in December, higher than the revised 1 per cent growth in November.

Maybank calculated the full year Nodx growth at 12.1 per cent versus 4.3 per cent in 2020, and the fastest annual gain since 2010 when it surged by 22.9 per cent.

ESG last raised its 2021 forecast for Nodx growth in November to a range of 9.5 per cent to 10 per cent.

Its December data showed that electronics shipments expanded 13.6 per cent year on year in December, extending the 29.2 per cent expansion in the previous month.

Exports of integrated circuits rose by 17.8 per cent, personal computers by 32.5 per cent and disk media products by 12.2 per cent, contributing the most to the growth in electronic Nodx.

Non-electronic products grew by 19.9 per cent, following the 22.6 per cent rise in the previous month.

The non-electronics gains were led by pharmaceuticals, with a 72.3 per cent increase, while specialised machinery rose 22.5 per cent and petrochemicals 28.4 per cent.

Nodx to the top markets rose overall in December, even as exports to the United States and South Korea declined. China, Indonesia and the European Union were the largest contributors to the rise.

Meanwhile, exports to emerging markets grew 38.8 per cent in December, adding to the 54.1 per cent surge in November, supported by demand mainly from the CLMV countries — Cambodia, Laos, Myanmar and Vietnam.

While shipments to China rose by 36.3 per cent last month, they were less than the 45.3 per cent gain in November.

Analysts said the slower pace of growth for exports to China was mainly a reflection of the overall economic slowdown in Asia’s largest economy.

Dr Chua Hak Bin, senior economist at Maybank Kim Eng Research, said; “The Omicron outbreak poses further downside risks as China’s zero-Covid policy could result in more extensive lockdowns.”

China has imposed targeted lockdowns in four of its largest port cities – Shanghai, Dalian, Tianjin and Shenzhen – to curb the outbreaks.

Ms Yue Su, principal economist at Economist Intelligence Unit (EIU) said; “The Covid-19’s impact on consumption in China is significant and could be easily underestimated.”

Analysts believe a slowing Chinese economy will further pressure exports that are set to slow this year.

ESG expects trade growth to ease from the high base this year and in November gave a “cautiously optimistic forecast” of zero to 2 per cent growth for both total merchandise trade and Nodx.

ESG’s projection chimes with the World Trade Organisation’s forecast for global merchandise trade growth to slow to 4.7 per cent this year, from the 10.8 per cent expected in 2021.

The export slowdown in Singapore is likely to be led by electronics, analysts said.

According to ESG data, electronics exports expanded 15.3 per cent in the third quarter on an annual basis, less than the 15.7 per cent rise in the second quarter.

Nicholas Mapa, senior economist at ING Bank said: "Should these trends persist into 2022, possibly due to the surge in Covid-19 cases across the globe, Nodx growth could moderate.” 

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