Singapore exports slide deepens in January; worse-than-expected 25% fall is fourth straight month of decline

SINGAPORE’S non-oil domestic exports (NODX) contracted for the fourth consecutive month in January, bogged down by declines in both electronics and non-electronics, data from Enterprise Singapore (EnterpriseSG) showed on Friday (Feb 17).

The month’s NODX tumbled 25 per cent from a high year-ago base, deepening from December 2022’s 20.6 per cent decline on the year. NODX in January 2022, nominally at S$17.7 billion, was higher than the monthly average level for the year.

But the performance was also worse than expected, outstripping the median 21.9 per cent decline forecast by economists in a Bloomberg poll.

The 25 per cent plunge to just S$13.3 billion, the lowest NODX value since June 2019, marked the worst pace of decline in a decade, said Maybank economists Chua Hak Bin and Lee Ju Ye.

Still, the weakness is “consistent with performance in other export-oriented countries such as South Korea (-16.6 per cent) and Taiwan (-20.6 per cent),” they added.

The duo and Oxford Economics senior Asia economist Alex Holmes agreed that Singapore’s export sector is likely to see further falls.

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On a seasonally-adjusted monthly basis, however, NODX grew 0.9 per cent in January, reversing from the 2.9 per cent decrease in the preceding month. Sequentially, electronic shipments continued to decline, but non-electronic NODX grew.

The month’s rise is “almost completely due to a jump in usually volatile shipments of pharmaceuticals that offset the decline in the electronics segment,” said Brian Tan, Barclays senior economist.

Seasonally adjusted, the level of NODX was S$14.5 billion for the month. This was higher than in December (S$14.3 billion), though lower than in the year-ago period (S$17.9 billion) and 2022’s average (S$16.6 billion).

Year on year, electronic exports shed 26.8 per cent in January, deepening from the previous month’s 17.9 per cent contraction. Contributing most to the decline were integrated circuits (-31.5 per cent), disk media products (-36.1 per cent) and parts of PCs (-42.6 per cent).

“A turn in the semiconductor cycle continues to hurt exports,” said Holmes. “In January, the value of domestically produced chip exports fell further below their March 2020 pandemic low and to almost half of their recent peak in May 2022.”

Non-electronic shipments also lost 24.5 per cent from the year-ago period, extending December’s 21.3 per cent decline. Non-monetary gold (-75.4 per cent), structures of ships and boats (-96.3 per cent) and specialised machinery (-16.4 per cent) were the main drivers of the fall.

The latest NODX print comes after Singapore’s manufacturing Purchasing Manager’s Index (PMI) remained in contraction in January, though overall factory activity edged up 0.1 point to 49.8. Electronics sector PMI also increased modestly, up 0.2 point to 49.1 in the sixth consecutive month of contraction.

Overall, NODX to Singapore’s top 10 markets declined in January, mainly due to falls in shipments to mainland China (- 41.1 per cent), the US (-31.5 per cent) and Hong Kong (-55.1 per cent).

Shipments to China, in particular, hit a seven-year low in value terms, despite the reopening, said the Maybank team, though they noted that this is likely because of the early Chinese New Year timing in 2023.

Only NODX to the European Union (EU) and Japan rose on the year in January. Shipments to the EU had contracted in December; exports to Japan had seen larger growth.

In line with the decline in NODX, total trade was down 10.4 per cent year on year in January, extending from December’s 7.7 per cent decline. Exports dropped 9.6 per cent, while imports contracted 11.3 per cent.

EnterpriseSG had said earlier this week in its review of 2022’s trade performance that NODX and total trade performance are expected to moderate this year due to last year’s high base.