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NON-OIL domestic exports (NODX) continued to grow for a third straight month in January, suggesting that a firm export recovery may finally have arrived.
January's 8.6 per cent year-on-year increase was below market expectations - the consensus was a 9.6 per cent gain - and lower than the growth in December (9.1 per cent) and November (15.6 per cent). But government and private-sector economists are looking at NODX growth returning to solid ground this year after a year of decline.
International Enterprise (IE) Singapore said "considerable uncertainties and risks" in the US and geopolitical arena may yet weigh on global trade, but said on Friday: "The global outlook has improved and activities are expected to pick up in 2017, especially in developing economies."
The trade promotion agency noted in its Review of 2016 Trade Performance that the International Monetary Fund and the World Bank had in their latest updates pointed to a stronger showing by the advanced economies in the year ahead as well.
IE Singapore has thus raised its 2017 growth forecast for NODX from the -1 to 1 per cent range to 0 to 2 per cent. But it has kept its growth forecast for total trade at 4 to 6 per cent.
OCBC Bank's Selena Ling said: "Looking ahead, the near-term momentum in manufacturing and exports should hold up at least in the first half of 2017 due to the green shoots in the global and regional manufacturing PMI (purchasing managers' index) data, as well as growth stabilisation within Asia."
She said that while NODX posted a 2.8 per cent year-on-year decline in 2016, against a 1.5 per cent rise in 2015, the final quarter of 2016 brought a turnaround in fortunes - NODX recovered to grow 2.7 per cent amid improved shipments of electronics (up 1 per cent) and non-electronics (up 3.5 per cent).
Noting that NODX exports to China surged 36.9 per cent in January, Chua Hak Bin of Mabank Kim Eng said: "China's import recovery is expected to continue, which augurs well for Singapore as its largest export market is China."
Citigroup's Kit Wei Zheng said that the ongoing regional technology restocking trend - which helped turn around NODX's January month-on-month performance from a 2.4 per cent slip in December to a 5 per cent rise last month - to continue to run in the first quarter of 2017.
Less upbeat was UOB Bank's Francis Tan; he is worried that anti-globalisation sentiments in the US - Singapore's second biggest source of final demand, said the Ministry of Trade and Industry - may "hurt the path of Singapore's export recovery".
Electronic and non-electronic NODX exports rose in January. Led by shipments of integrated circuits, parts of PCs and disk media products, electronic NODX extended its rise for a third straight month to 6.1 per cent last month, up from a 5.7 rise in December and 3.5 per cent in November.
Non-electronic NODX, after a 21.1 per cent spike in November which eased to a 10.7 per cent rise in December, still chalked up 9.9 per cent growth in January.
IE Singapore said in its report on the latest trade data, also released on Friday: "Specialised machinery, petrochemicals and non-monetary gold expanded by 104.7 per cent, 37.1 per cent and 30.7 per cent respectively, contributing the most to the rise in non-electronic NODX."
Except for the European Union and Malaysia, shipments to all 10 major markets rose, with China, Taiwan (up 75.3 per cent) and South Korea (51.5 per cent) being the biggest contributors to NODX's rise last month.
OCBC's Ms Ling noted that NODX exports to Hong Kong also went up (16.7 per cent), lending "credence to the greater Chinese market trade pick-up".
The main drags were the EU market, which shrank for three of the last four months by 25.2 per cent; the Malaysia market shrank for the second consecutive month by 3.7 per cent.
Also notable was oil domestic exports, which jumped 65.4 per cent in January - the fifth straight month of increase after a 24-month decline, UOB's Mr Tan noted.
The surge was due not just to the recovery in oil prices but also to higher sales, especially to Indonesia (up 154.4 per cent), China (119.7 per cent) and Hong Kong (85.3 per cent).