Singapore’s non-oil domestic exports (NODX) expanded by 2.7% y-o-y in August, easing from the 17.2% y-o-y growth in July. The lower figure stems from the high base posted in 2020.y
The figures marked a softer-than-expected growth, disappointing market estimates of an 8.5% y-o-y growth.
According to official data released on Sept 17 by trade agency Enterprise Singapore (ESG), August’s NODX was due to growth in the electronics sector.
The non-electronics sector, however, registered a decline after eight consecutive months of growth since December 2020.
Electronic NODX expanded by 16.7% y-o-y in August, extending the 15.0% growth seen in July.
Integrated circuits (ICs), diodes & transistors, as well as parts of ICs led the growth in the sector at 20.2%, 35.5% and 116.6% respectively.
Non-electronic NODX shrank by 1.4% y-o-y following the 12.0% expansion in the previous month.
This time, non-monetary gold, food preparations and pharmaceuticals contributed the most to the decline at -66.4%, -27.1% and -12.4%.
On a seasonally adjusted m-o-m basis, NODX declined by 3.6% to $15.5 billion from July’s $16.1 billion. The lower NODX also follows the 0.9% m-o-m decrease posted in July.
NODX to Singapore’s top 10 markets rose on the whole in August
See also: Singapore's NODX expands by 17.2% in July owing to growth in non-electronics and electronics
The largest contributors to the increase were Taiwan (+50.8%), Hong Kong (+22.8%) and Malaysia (+17.9%).
Meanwhile, NODX to China and the EU27 declined.
NODX to Taiwan expanded due to specialised machinery, ICs and measuring instruments, while NODX to Hong Kong were attributable to ICs, disk media products and electrical circuit apparatus.
NODX to Malaysia grew due to ICs, petrochemicals and diodes & transistors.
NODX to emerging markets expanded by 2.6% y-o-y in June, mainly due to South Asia, Cambodia, Laos, Myanmar and Vietnam (CLMV) and the Middle East at 48.5%, 26.7% and 7.8% respectively.
During this time, Singapore’s non-oil re-exports (NORX) increased by 18.0% y-o-y in August, following the 13.9% increase in July.
Both the electronics and non-electronics segments registered expansions.
Electronic NORX expanded by 29.3% y-o-y due to ICs, personal computers (PCs) and diodes & transistors at 42.8%, 65.6% and 14.1% respectively.
Non-electronic NORX grew by 6.6% y-o-y due to specialised machinery (+74.2%), aircraft parts (+21.6%) and nickel (+739.0%).
NORX to the top 10 markets grew in August except South Korea.
In this month, the top three contributors to the increase in NORX were Hong Kong (+44.5%), China (+20.8%) and Taiwan (+47.0%).
On a seasonally adjusted m-o-m basis, NORX grew by 7.5% to $27.7 billion, from the $25.8 billion in July, thanks to expansions in both the electronic and non-electronic sectors.
Total trade for August was up by 19.8% y-o-y, extending the 19.0% y-o-y growth in the previous month.
Total exports rose by 17.4%, while total imports expanded by 22.8%.
On a seasonally adjusted m-o-m basis, total trade rose by 2.2% to $95.6 billion, from the $93.6 billion in July.
Total exports grew by 4.5% m-o-m, while total imports fell 0.3% m-o-m.
Bank of America (BofA) Securities analyst Mohamed Faiz Nagutha says August's NODX figures were weaker than expected, but it was mainly due to the plunge in gold.
Without gold, NODX was up 18% y-o-y and 17% year-to-date (y-t-d).
According to Nagutha, the data remains "broadly supportive" of his 7.5% growth forecast, and that he sees no marginal impact on the Monetary Authority of Singapore (MAS).
Maybank Kim Eng analysts Chua Hak Bin and Lee Ju Ye have also kept their growth forecast at 9% as resilient demand for chips and related electronics equipment will provide support.
"However, downside risks remain with China’s slowdown and tight freight capacity. Global container-freight rates are already four times higher than a year ago and have yet to peak," they write.
The Singapore Research team at RHB anticipates a softening in growth momentum in NODX for the latter half of 3Q2021. In addition, moderation in terms of y-o-y growth is also expected to happen in September, partly due to the high base.
The team also expects a moderation in growth as exports performance may ease slightly in the consequent months, it writes.
While electronics and semiconductor exports will continue to support the overall performance, soft activities from major trading partners like China may result in headwinds in trade performance, adds the RHB team.
UOB economist Barnabas Gan has kept his full-year growth outlook at 8.0% for 2021. In his report, Gan says he believes Singapore's external-facing industries will benefit from the continued recovery of the global trade. Higher commodity prices may provide the stimulus to overall export value ahead, he adds.
Photo: Bloomberg
