Singapore's non-oil exports surge 18.4% in December

Singapore wrapped up 2021 as its best year for shipments since 2010, with key exports growing last month for the 13th month in a row.

Being one of the world's top hubs 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 - which further pushed up the demand for electronic products such as mobile phones and computers.

Demand for pharmaceuticals and rising prices of petrochemicals also helped.

Analysts said export growth may slow this year as the high base effect, particularly for electronic exports, kicks in. The outlook may have further downside if the Chinese economy continues to slow and new waves of Covid-19 infections surge worldwide.

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) yesterday. The growth was led mainly by non-electronic exports.

The pace of growth last month 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 last month, 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. It was the fastest annual gain since 2010, when it surged by 22.9 per cent.

ESG's data for last month showed that electronic shipments expanded 13.6 per cent year on year, extending the 29.2 per cent expansion in the previous month.

Export of non-electronic products grew by 19.9 per cent, led by pharmaceuticals with a 72.3 per cent increase, while specialised machinery rose 22.5 per cent and petrochemicals 28.4 per cent.

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 The Economist Intelligence Unit, said: "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 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 last year.

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

According to ESG data, electronic 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.

Mr 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."

According to ESG data, total trade expanded 31.4 per cent last month, following November's 31.3 per cent growth.