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NODX up 21.5% in February, the biggest rise in 5 years

Some economists expect the run to continue, others say it'll end by mid-year; but all worry protectionism would derail recovery

Non-oil domestic exports (NODX) surged 21.5 per cent year-on-year in February, beating market expectations and expanding for a fourth straight month.


NON-oil domestic exports (NODX) surged 21.5 per cent year-on-year in February, beating market expectations and expanding for a fourth straight month.

The rise, the strongest on-year growth in five years, came after an increase of 8.6 per cent in January, 9.1 per cent in December and 15.6 per cent in November.

Private-sector economists expect the expansion to continue - indicating a recovery is finally here for NODX - though a few say it will ease by mid-year.

Market voices on:

UOB's Francis Tan wrote in a report: "Looking ahead, overall NODX could be strongly supported by electronics exports. The new export orders for electronics PMI (purchasing managers' index) points to a more sustained pickup in Singapore's electronics exports at least in the first half of the year."

But Nomura's Euben Paracuelles and Brian Tan say NODX growth will moderate because they do not expect the surge in gold exports to be sustained.

They said in a note: "The sequential decline in electronics exports is also consistent with our view that the recent surge in electronics production may not last beyond the first half."

(Gold shipments soared 104.3 per cent in February, while the value of electronics exports slipped from S$4.3 billion in January to S$3.8 billion in February.)

Still, despite the differences in their outlook for NODX, all private-sector economists remain wary of trade protectionism, which they warn could derail Singapore's export recovery.

Trade promotion agency International Enterprise (IE) Singapore, which released the latest trade data on Friday, had projected the NODX, which had slipped 2.8 per cent year-on-year in 2016, to grow by between 0 and 2 per cent.

February's rise in NODX, which private-sector economists said was partly propped up by a lower base, was almost two times bigger than the 12.8 per cent average increase which they had tipped.

Month on month, the NODX saw a seasonally adjusted 1.4 per cent uptick in February, after a 5 per cent increase in January. The NODX jumped from a seasonally-adjusted S$14.9 billion in January to S$15.1 billion last month.

IE Singapore said that NODX shipments to all the 10 top markets rose in February, with China, the EU and Taiwan emerging as the top three contributors to NODX's gains last month.

Led by non-monetary gold, petrochemicals and specialised machinery, NODX shipments to China soared 65.1 per cent year-on-year in February - up from 36.9 per cent in January.

Exports to the EU, which tumbled 25.2 per cent in the previous month, climbed 28.7 per cent, thanks to higher exports of non-monetary gold, diodes and transistors and specialised machinery.

Shipments to Taiwan eased from a 75.3 per cent growth in January to a still-strong 54 per cent gain.

Except for the US and Thailand, NODX exports to all 10 top markets jumped by double digits last month. Shipments to the US, the second biggest source of final demand for Singapore goods, inched up 1.4 per cent; exports to Thailand rose 6.7 per cent.

The rise in February's NODX was broad-based. Electronic NODX expanded 17.2 per cent, up from a 6.1 per cent rise in January - which was then the third month of increase after eight consecutive months of decline.

The recovery in electronic NODX last month was broadened beyond integrated circuits (+25.8 per cent) to disk media products (+26.9 per cent) and parts of PCs (+19.7 per cent).

Non-electronic NODX rose 23.3 per cent following a 9.8 per cent expansion in January, backed by an increase in shipments of petrochemicals (+45.3 per cent), specialised machinery (+111.8 per cent) and non-monetary gold (+104.3 per cent).

Oil domestic exports grew 82.5 per cent in February, rising for the sixth straight month. Before that, oil domestic exports had tumbled for 24 months straight. The increase last month came mainly from higher oil prices and higher sales to Indonesia (+94 per cent), China (+124.6 per cent) and Australia (+250.8 per cent).

Non-oil re-exports, a measure of regional and global trading sentiments, jumped 10 per cent in Febuary, up sharply after a 1.5 per cent rise in January.