Singapore’s non-oil domestic exports (NODX) expanded by 15.9% y-o-y in June from its low base in 2020.
The increase is also attributable to growth in the non-electronics sector, although both the electronic and non-electronic sectors saw growth in June.
The expansion follows the 8.6% rise in May, and marks the seventh consecutive month of NODX expansions since December 2020.
June’s performance also exceeds the expectations of private-sector economists’ estimates of an 8% rise. The median figure was logged in a Bloomberg poll.
During the month, electronic products grew by 25.5% y-o-y, which was led by the 130.2% y-o-y surge in personal computer (PC) exports.
Integrated circuit (ICs) and diodes & transistors increased by 14.9% and 32.2% y-o-y respectively, contributing to the second- and third-most growth in electronic NODX.
Non-electronic shipments expanded by 13.2% y-o-y in June, which was mainly boosted by specialised machinery (+43.2%), petrochemicals (+51.2%) and jewellery.
On a seasonally adjusted month-on-month (m-o-m) basis, Singapore’s NODX grew by 6.0% in June to $16.3 billion, from May’s $15.3 billion.
NODX to Singapore’s top 10 markets grew on the whole in June, with the largest contributors being China (+27.6%), the EU 27 (+36.7%) and Taiwan (+41.4%).
On the other hand, NODX to the US, Japan and Malaysia declined.
NODX to China grew due to specialised machinery, pharmaceuticals and petrochemicals, while shipments to the EU 37 were attributable to specialised machinery, pharmaceuticals and primary chemicals.
NODX to Taiwan were boosted due to ICs, measuring instruments and petrochemicals.
NODX to emerging markets expanded by 68.2% y-o-y in June, mainly due to Cambodia, Laos, Myanmar and Vietnam (CLMV), South Asia and the Caribbean.
Meanwhile, Singapore’s non-oil re-exports (NORX) grew by 15.1% y-o-y in June from a low base in 2020, albeit slightly slower than the 31.7% expansion logged in May.
The expansion was attributable to growth in both the electronics and non-electronics sectors.
Electronic NORX saw a 13.9% y-o-y growth in June due to ICs (+21.1%), parts of PCs (+7.4%) and capacitors (+30.3%).
According to Enterprise Singapore (ESG), the growth in ICs came amid strong global semiconductor demand.
Non-electronic NORX grew by 16.6% y-o-y in June, boosted by copper, non-monetary gold (+95.5%) and alcoholic beverages (+92.4%).
See also: February NODX up by 4.2% on surge in non-monetary gold and PCs
On a seasonally adjusted m-o-m basis, NORX fell by 9.4% y-o-y in June to $25.9 million, compared to May’s $28.6 billion. due to a decline in both electronics and non-electronics.
NORX to Singapore’s top 10 markets grew, with the top three contributors being Hong Kong (+31.3%), China (+32.8%) and Indonesia (+37.9%).
NORX to the EU 27, Malaysia, South Korea and Japan declined in June.
Total trade in June grew by 25.0% y-o-y, extending the 30.9% y-o-y expansion seen in May. During the period, total exports rose by 22.3% y-o-y, while total imports grew by 28.3% y-o-y.
On a seasonally adjusted basis, total trade declined by 0.4% m-o-m in June to $94.7 billion, following the 0.8% decrease in May to $95.0 billion.
M-o-m, total exports in June fell by 2.6%, while total imports increased by 2.2%.
Looking ahead, UOB economist Barnabas Gan believes that the uptick in semiconductor demand and rising oil prices will be strong drivers to lift Singapore’s export momentum in 2021. Noting that June’s NODX growth momentum has positively surprised market expectations by a large margin, Gan believes further upside lays ahead.
To that end, he has raised his NODX growth expectation to 8% for 2021, up from 5% previously.
Maybank Kim Eng analysts Chua Hak Bin and Lee Ju Ye also raised their 2021 NODX forecast, now 9%, from the previously forecasted 5-6%. "Strong global demand for chips from data centres and 5G markets, and electronics products will likely extend into the second half of the year. We expect Enterprise Singapore to upgrade its NODX forecast, which is currently at 1%-3%, during its quarterly update in August," the analysts mull.
RHB's Singapore research team echoes the upbeat sentiments. "We expect NODX to moderate slightly in 3Q2021 as the low-base effect dissipates. However, strengthening global demand should continue to sustain NODX performance," the team says.
Meanwhile, Oxford Economics' Sung Eun Jung is bearish on the slowing sequential momentum for trade exports and imports, noting that total exports contracted 3% m-o-m based on a three-month moving average in June, following +0.3% growth in May, while import volumes also eased to -0.6% m-o-m from 0.8% in May.
She attributes the slower momentum to sporadic disruptions at ports due to the ongoing pandemic and global chip supply shortage.
Nonetheless, she remains optimistic on the longer-term outlook, though she is cautious about potential headwinds. "While we expect a strong global economic recovery, China’s domestic weakness and ongoing restrictions in the region could weigh on Singapore’s short-term export outlook," she says.
Photo: Bloomberg
