Singapore non-oil exports shrink 4.9% in November in 2nd surprise fall

However, exports to the US, Japan, Taiwan, Malaysia, Thailand and Hong Kong grew.
However, exports to the US, Japan, Taiwan, Malaysia, Thailand and Hong Kong grew.ST PHOTO: KUA CHEE SIONG

SINGAPORE - Singapore's non-oil domestic exports (Nodx) saw a surprise drop for the second straight month in November, mainly due to declines in shipments of petrochemicals, pharmaceuticals and non-monetary gold, followed by electronics.

Nodx fell 4.9 per cent year on year in November after a 3.1 per cent decrease in October, Enterprise Singapore (ESG) said on Thursday (Dec 17). Before October, Singapore saw four consecutive months of Nodx growth.

The drop in last month’s exports dashed hopes of a recovery from October’s decline. Economists in a Bloomberg survey had forecast a 0.3 per cent year on year gain in November Nodx.

Analysts said the disappointing November data highlights the upward trudge global trade faces in 2021 and raises the possibility of Singapore missing the its official forecast for Nodx to grow by 4 to 4.5 per cent this year.

Mr Howie Lee, an economist at OCBC Bank, said the high base set in the fourth quarter of 2019 means that Nodx performance in this quarter would likely be relatively muted, compared to the stronger growth numbers that seen for much of 2020.

“With uncertainty over global economic recovery still high, we firmly expect risks to Nodx growth in the coming year to be tilted to the downside,” he said.

Mr Lee predicted that Singapore’s Nodex in December will decline by 1.3 per cent year on year, which may bring the full-year 2020 Nodx performance to an expansion of 3.6 per cent - less than the ESG forecast. 

For 2021, OCBC’s estimate stands at 1 per cent year on year Nodx growth - highly predicated on successful vaccine deployment, Mr Lee said.

For November, electronic exports declined by 3.8 per cent last month, following the 0.5 per cent drop in October, with integrated circuits (ICs), disk media products and parts of PCs contributing the most to the decline.

Exports of ICs fell 7.9 per cent, disk media products dropped by 9.7 per cent and PC parts were down 12.1 per cent. The decline in ICs exports was much steeper in November 2019 when it fell by 37 per cent.

Non-electronic shipments dropped by 5.2 per cent year on year, after a 4 per cent fall in October. Petrochemicals, pharmaceuticals and non-monetary gold contributed the most to the decline in non-electronic Nodx.

Petrochemical exports fell 18.5 per cent amid subdued demand. The typically volatile pharmaceuticals dropped 13.4 per cent and non-monetary gold 15.1 per cent.

Though the pace of decline for gold eased from October, when it fell by whopping 61 per cent, demand for the precious metal has eased since its international price peaked in August’s amid optimism over Covid-19 vaccines and signs of recovery in the US.

On a month-on-month and seasonally adjusted basis, Nodx in November rose 3.8 per cent, after the previous month’s 5.4 per cent decline and a much steeper 11.4 contraction in September.

Both electronic and non-electronic domestic exports grew month-on-month, suggesting that the global demand for goods may have started to stabilise.

Mr Sin Beng Ong, an analyst at JPMorgan Chase Bank’s Singapore branch, said the month-on-month gain in Nodx should broaden into 2021.

“The monthly ebb and flow of Singapore’s Nodx tends to be noisy, due in part to the volatility in pharmaceuticals. However, in trend terms, the underlying recovery in goods demand should continue though mixed in with periodic volatility and underpins our view of a gradual recovery through next year,” he said.

Nodx to the top markets as a whole declined in November, though exports to the US, Japan, Taiwan, Malaysia, Thailand and Hong Kong grew. The largest contributors to the decline in November Nodx were China, the European Union and Indonesia.

Total trade fell by 8.7 per cent year on year in November, following the 9 per cent drop in the preceding month.

Total exports shrank by 8 per cent, following October’s 8.7 decline. Total imports declined by 9.4 per cent after the 9.3 per cent decrease in October.