Singapore’s key exports contract 2.1% in January amid Chinese New Year

SINGAPORE – Singapore’s key exports remain resilient even though they contracted in January amid the Chinese New Year period, following two consecutive months of expansion in November and December 2024.

Factories and operations across many parts of Asia typically cool during the festive period.

Compared with a year earlier, non-oil domestic exports (Nodx) in January contracted by 2.1 per cent, following a 9 per cent increase in December and a 3.4 per cent growth in November, Enterprise Singapore (EnterpriseSG) said in a Feb 17 release.

Bloomberg had a median 0.3 per cent growth forecast for Singapore’s Nodx in January.

On a seasonally adjusted monthly basis, Nodx slipped 3.3 per cent in January, reversing from December’s 1.3 per cent rise, suggesting weakness even if the Chinese New Year effect was stripped away.

But Ms Sheana Yue, an economist at Oxford Economics, said the dip in January was not cause for concern. The overall trend and external conditions still point to resilience for exports from Singapore over the coming year, underpinned by a strong global electronics cycle.

“As such, Singapore’s exports growth, while likely to moderate, is unlikely to collapse in 2025,” Ms Yue said. 

DBS Bank economist Chua Han Teng expects the slip in January Nodx to be temporary.

He said it is better to gauge Singapore’s export dynamics based on both January and February data as this will smooth out the typical Chinese New Year holidays-related volatility observed in the first quarter of the year.

“We anticipate a rebound and a continuation of the positive Nodx performance that was observed in the final months of 2024 in early 2025,” he said.

“Near-term external demand for Singapore’s exports remains resilient, as indicated by the continued expansion of new export orders in both headline and electronics manufacturing purchasing managers’ indexes as at January,” Mr Chua added.

While trade uncertainty looms large under the new US administration and could escalate further, many economists expect limited impact on Singapore, at least in the first quarter of 2025.

They expect “front-loading” of exports, as countries rush to beat US President Donald Trump’s tariffs, to provide some near-term support to Singapore’s Nodx.

Beyond the immediate near term, a wider global trade war still poses medium-term challenges and downside risks to highly trade-dependent Asian economies, including Singapore.

On Feb 14, EnterpriseSG announced that Nodx grew 0.2 per cent in 2024 from a 13.1 per cent contraction in 2023.

Growth came in below the official forecast of “around 1 per cent”.

EnterpriseSG’s 2025 Nodx forecast stood at 1 per cent to 3 per cent, as it flagged downside risks from a further escalation of geopolitical conflicts and higher uncertainty over US trade policies under Mr Trump.

Singapore’s Nodx’s weaker performance in January was due to a moderation in both electronics and non-electronics shipments, Mr Chua said.

Key electronics shipments rose by 9.6 per cent year on year in January, following an 18.6 per cent expansion in December 2024. 

Growth was underpinned by integrated circuits (14.6 per cent), personal computers (66.7 per cent) and disk media products (31.5 per cent).

Non-electronics Nodx declined by 4.8 per cent year on year in January, after the 6.6 per cent growth in December 2024. Volatile pharmaceuticals, trailed by specialised machinery and miscellaneous manufactured articles, contributed the most to the drop. 

Nodx to Hong Kong, the US and Taiwan grew in January, though shipments to China, Indonesia, the European Union, Thailand and Malaysia declined. 

Shipments to the US rose by 27.8 per cent in January from a year earlier, following the 30.7 per cent growth in the month before, owing to non-monetary gold, disk media products and medical apparatus.

Unlike monetary gold exchanged among central banks worldwide, non-monetary gold refers to all other types of gold in circulation. It can take the form of coins, ingots, bars or powder.

According to the World Gold Council, jewellery accounts for half of the total gold demand.

Gold is also used as an industrial metal, and as a coating or thin bonding wires for most types of semiconductor chips.

Shipments to Hong Kong expanded by 113.3 per cent year on year in January, extending the 23.8 per cent growth in December, owing to specialised machinery (348.8 per cent), integrated circuits (92.6 per cent) and non-monetary gold (160 per cent).

Nodx to Taiwan grew by 48.3 per cent year on year in January, extending a 50.8 per cent expansion in December. Growth was underpinned by specialised machinery, measuring instruments, as well as structures of ships and boats.

The main drag on Nodx was China, which saw a 48.4 per cent plunge in shipments versus a 12.7 per cent fall in December owing to the Chinese New Year holiday, said Dr Chua Hak Bin, an economist at Maybank.

Maybank is forecasting Nodx growth to weaken to 3 per cent in 2025, down from a 5.7 per cent expansion in the second half of 2024, as the US’ broadening tariff war threatens to slow global trade, particularly in the second half of 2025. 

“The January data continues to offer hints of front-loading amid Trump’s tariff hikes on Chinese shipments. Although shipments to China saw a sizeable plunge, shipments to Hong Kong, a key re-exporting hub for China-bound goods, more than doubled due to electronics,” Dr Chua said.

Maybank expects another easing move by the Monetary Authority of Singapore at the central bank’s April or July meeting amid global trade uncertainty and a tame inflation outlook. 

Compared with a year earlier, total trade rose by 6.7 per cent in January, following a 19 per cent expansion in December.