Rebound in October exports signals brighter outlook

20.9% surge far exceeds estimates of 11.9% rise, with non-electronics shipments leading pickup

October’s robust performance – the strongest pace of growth in eight months – was attributed in part to a low base last year.
October’s robust performance – the strongest pace of growth in eight months – was attributed in part to a low base last year.PHOTO: ST FILE

The party continues for Singapore exporters as shipments rebounded last month after a disappointing showing in September.

Exporters started the last quarter of the year on a strong footing as non-oil domestic exports (Nodx) surged 20.9 per cent in October over the same month a year earlier, blowing past economists’ estimates of an 11.9 per cent rise.

The data is the latest in a string of robust numbers pointing to better days ahead for the Singapore economy, thanks largely to a stronger global outlook. Still, economists noted that electronics shipments – which have been a key driver of growth this year – could be slowing.

October’s robust performance – the strongest pace of growth in eight months – was attributed in part to a low base last year. But it still made up for an unexpected 1.1 per cent declinefall in September which came after five straight months of growth.

Electronics exports increased by 4.5 per cent year on year in October after an 8 per cent decline in the preceding month.

But non-electronics shipments led the pickup in growth, rising 28.5 per cent from 1.9 per cent in September. The increase was driven by a sevenfold surge in exports of non-monetary gold – to China in particular – which reflected a low base in October last year, said trade agency IE Singapore. Petrochemical and pharmaceutical shipments also picked up last month.

Shipments to most of Singapore’s top Nodx markets went up, with the exception of Taiwan, Hong Kong and Indonesia.

Growth was led by exports to China, the European Union and Malaysia.


The latest export numbers come as stronger global growth has helped boost Singapore’s manufacturing sector, which makes up a fifth of the economy and has been its brightest spot this year. Two-thirds of manufactured goods are exported.

“We saw from October export data from Korea and Taiwan signs of the electronics-led export recovery tapering out in the final quarter of the year. Singapore data doesn’t support this view, nor does it defy it,” said ING economist Prakash Sakpal.

“With the seasonal product replacement cycle for flagship mobile devices coming to an end, the Nodx growth is likely to ease in the months ahead. Nonetheless, today’s data signals a good start to the fourth quarter of the year,” he added.

Maybank Kim Eng economist Chua Hak Bin also expects Nodx growth to ease in the next two months, largely due to high base effects. But he remains upbeat on the overall outlook. Dr Chua’s forecast is for the economy to expand 3.4 per cent this year – above the Government’s forecast range of 2 per cent to 3 per cent growth.

“We think services will contribute a greater proportion to growth in 2018 as the recovery broadens from trade and transport and storage to the more domestic-oriented sectors,” he said.

SIM Global Education senior lecturer Tan Khay Boon said: “With China, the EU and US all generating significant increases in export demand, the year-end seasonal demand may contribute towards a perfect ending for strong growth of Singapore’s economy in 2017.”

A version of this article appeared in the print edition of The Straits Times on November 18, 2017, with the headline 'Rebound in Oct exports signals brighter outlook'. Subscribe