SINGAPORE – The slump in Singapore’s key exports eased again in October, with analysts tipping a gradual and uneven recovery back to growth in the months ahead.

Non-oil domestic exports (Nodx) fell 3.4 per cent in October from the same month a year ago, according to data released by trade agency Enterprise Singapore (EnterpriseSG) on Nov 17. 

It marked the 13th straight month that shipments shrank on a year-on-year basis.

But the data beat the expectations of analysts polled by Bloomberg who predicted a drop of 6 per cent.

October’s export decline was also much less than the 13.2 per cent fall in September.

In another sign of improvement, on a month-on-month seasonally adjusted basis, Nodx grew by 3.4 per cent in October, extending September’s 11.1 per cent expansion.

EnterpriseSG noted that a low base helped electronic and non-electronic exports to decline less sharply in October.

Electronic shipments dropped 5.6 per cent year on year, easing from the 11.6 per cent fall of the previous month.

The decline was led by integrated circuits, diodes and transistors, and parts of personal computers.

Non-electronic Nodx also fell, by 2.7 per cent in October. This was an improvement from the 13.7 per cent drop the previous month.

Food preparations, non-electric engines and motors, and electrical machinery contributed the most to the decline.

DBS economist Chua Han Teng said base effects were supportive in October and will continue to be so in the coming months.

“Forward-looking indicators also point to a gradual and fragile exports recovery, notwithstanding a still uncertain global economic environment due to high interest rates in advanced economies and a bumpy recovery in China,” he added.

EnterpriseSG data shows exports to Singapore’s top markets fell as a whole, led by Taiwan, the United States and South Korea.

But shipments to China, the European Union, Thailand and Hong Kong rose.

Barclays bank economist Brian Tan noted a surge in shipments of specialised machinery related to electronics manufacturing.

“The bulk of the increase (was) largely due to China, likely reflecting its drive for self-sufficiency in semiconductor production – in addition to a more generalised sequential recovery in electronics exports,” he said.

Total trade grew in October, with exports rising while imports declined.

Total trade expanded by 0.3 per cent over the same month in 2022, after the 12.5 per cent contraction in the previous month.

This was due to the increase in oil trade, while non-oil trade decreased.

Looking ahead, Maybank economists Brian Lee and Chua Hak Bin said they expect export growth to return to positive figures by the end of 2023 and into 2024.

“Exports and manufacturing are recovering from the deep downturns seen earlier in the year, albeit at an uneven and gradual pace,” they said. They also said Nodx and non-oil re-exports add to the “green shoots” seen in industrial production.

However, they cautioned that “the strength and sustainability of the recovery may be kept in check, given uneven global growth”.

OCBC Bank chief economist Selena Ling said the global electronics cycle may have bottomed out and is looking to stabilise in the months ahead.

“For 2024, Singapore’s Nodx growth may rebound to 4 per cent to 6 per cent year on year, partly due to the low base in 2023 and assuming that the global economy may still see a modest slowdown in some of the major economies like the US and range-bound growth prospects in China,” she said.

RHB acting group chief economist Barnabas Gan also expects the recovery momentum to continue.

“Asean trade numbers are also improving, with export momentum significantly accelerating in China. Global equities have also rallied in the quarter to date, highlighting the improved investors’ risk appetite,” he noted.

“Singapore, being a highly open and trade-reliant economy, will benefit from a relatively rosier backdrop, should it persist into early 2024.”