Singapore’s non-oil domestic exports (NODX) ended the year with a surprise increase in December that broke a two-month slowdown.
Official figures released by trade agency Enterprise Singapore (ESG) on Jan 18 showed a 6.8% y-o-y expansion in NODX thanks to a growth in both electronics and non-electronics shipments.
This is a significant improvement from 5.0% contraction registered in the previous month.
December’s showing also surpasses the median decrease of 1.1% forecast by private-sector economists in a Bloomberg poll.
The expansion was led by a 13.7% y-o-y surge in the linchpin electronics shipments, a tremendous pickup from the 4.0% decline staged in November due to a low base from the year before.
Growth from parts of PCs (33.8%), diodes & transistors (16.5%) and ICs (15.7%), were contributors to the segment’s performance, ESG notes.
Non-electronic shipments similarly surged by 5.0% y-o-y in December, after declining by 5.3% in the month before.
The segment was lifted by expansions, particularly in the exports of specialized machinery (+30.9%), measuring instruments (+21.4%) and non-monetary gold (+14.5%).
SEE: Growth in Singapore's non-oil domestic exports slows to 6% in July
On a m-o-m seasonally adjusted basis, NODX rose by 6.6% in December, extending the previous month’s 3.7% increase. This comes from growth in both electronic and non-electronic exports, ESG explains.
These developments translated to $14.5 billion in December down from $13.6 billion in November.
In this time, Singapore’s NODX to six of its top 10 markets grew in the last month of the year, with exports to the US (+52.5%), South Korea (+46.2%) and Taiwan (+14.8%) being the top performers.
The surge in shipments to the US is an extension from the previous month’s 9.5% growth and was led by stronger exports of pharmaceuticals (+79.9%), measuring instruments (+27.5%) and non-monetary gold.
Similarly, the expansion in exports to Taiwan continues from November’s 8.7% increase and comes from higher shipments of ICs (+48.1%), other specialty chemicals (+51.2%) and structures of ships & boats.
Conversely, South Korea’s performance is a deviation from the 9.7% decline in its NODX in November. A pick up in specialised machinery (+362.1%), measuring equipment (+42.4%) and heating & cooling equipment were the main contributors to this.
Meanwhile, Singapore’s non-oil re-exports (NORX) was up by 5.4%, improving from the 2.2% increase it posted from the previous month. This comes as the growth in electronic re-exports outweighed the decline in that for non-electronics, ESG says.
Electronic re-exports were up 23.8% y-o-y, due to higher shipments of parts of PCs (+67.2%), diodes & transistors (+52.3%) and ICs (+26.1%).
This increase helped mitigate the 10.1% contraction in non-electronic re-exports which was affected by declines in piston engines (-54.5%), non-electric engines & motors (-38.6%) and aircraft parts (-32.1%).
On a seasonally adjusted month-on-month basis, NORX shrank by 1.2% - reversing from the previous month’s 3.7% growth. This equates to $24.6 billion in takings, lower than the $24.9 billion in October.
NORX shipments to the top 10 markets grew, with the key contributors being the EU 27 (+26.1%), China (+25.6%) and Hong Kong (+9.9%).
Total trade for December inched down by 0.3% improving the previous month’s 7.3% decline. In this time, total exports grew by 2.6% - from a 5.4% decline in November, while total imports contracted by 3.4%, from 9.4% in the month before.
On a month-on-month seasonally adjusted basis, total trade expanded by 1.5%, up from November’s 1.5%. With this, total trade reached $82.5 billion in October, higher than November’s $81.2 billion.
To Barnabas Gan, economist at UOB, December’s NODX “does paint an optimistic backdrop for 2021”.
“While growth could be partly attributed to the low base of electronic exports in 2019 (2020: +4.9% y-o-y, 2019: -22.5% y-o-y), full-year NODX expansion of pharmaceutical products (2020: +10.4% y-o-y, 2019: -15.0% y-o-y) underlined Singapore’s vital role in the production and exports of biomedical products, especially during the Covid-19 pandemic,” he elaborates.
Gan reckons that Singapore’s position in producing and supplying biomedical products and supplies – especially now as countries still grapple with the coronavirus – will likely continue to lift overall manufacturing activities and support NODX into next year.
Still he is “cautiously optimistic” that the metric will expand by 1.0% in 2021.
His counterparts – Chua Hak Bin and Lee Ju Ye from Maybank Kim Eng are also positive and expect a rise in NODX to 3% to 4% this year.
“We stay positive on the exports outlook as global trade firms with the rollout of a vaccine that will ease lockdowns in more regions by the second half of 2021. Electronics exports will likely stay resilient in 2021, on continued demand for semiconductors for cloud services, data centres and 5G rollout,” they say.
The downside risk they anticipate is from the possibility that the US-China tech war continues to rage in 2021.
