Singapore non-oil exports grow 8.8% y-o-y in May, extending April's gains: ESG

SINGAPORE'S key exports in May grew 8.8 per cent year on year, extending the previous month's gains, but fell short of economists' expectations.

May's non-oil domestic exports (NODX) rose 8.8 per cent year on year, continuing April's 6 per cent rally, as both electronic and non-electronic exports grew, according to Enterprise Singapore (ESG) on Thursday.

Even though exports expanded for six straight months, May's showing was a disappointment to private-sector economists, who had anticipated a 16 per cent year-on-year expansion, according to a Bloomberg poll.

Electronic exports rose 11 per cent, continuing April's 10.9 per cent growth. This was attributed mainly to a 53.9 per cent growth in the exports of diodes and transistors; 52.3 per cent increase in telecommunications equipment; and a 5.8 per cent rise in exports of integrated circuits, said ESG.

Exports of non-electronic products expanded 8.1 per cent, following gains of 4.7 per cent in April. ESG said exports of primary chemicals contributed the most to growth at 96.8 per cent; specialised machinery, 58 per cent; and petrochemicals, 55.7 per cent.

However, on a month-on-month seasonally adjusted basis, NODX dipped 0.1 per cent in May, after the previous month's 8.8 per cent decline, on the back of falling non-electronics exports even as that for electronics grew.

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Brian Tan, Barclays regional economist, noted that the main drag appears to have stemmed from a pullback in exports of specialised machinery, which had earlier been boosted by shipments of specialised machinery for the manufacture of electronics and semiconductors.

"The relative resilience of NODX in May suggests the manufacturing sector likely suffered only slight disruptions, at worst, from the recent tightening of social-distancing measures," he said.

Singapore began tightening Covid-19 rules in early May - reverting to work from home as a default while banning dine-ins - following a resurgence of infections seeded by the Delta variant.

UOB economist Barnabas Gan noted that NODX enjoyed a low base from May 2020, where it fell 4.7 per cent year on year as the Republic entered a "circuit breaker" or partial lockdown.

"Nonetheless, Singapore's external-facing industries are expected to benefit from the continued recovery of the global trade wind, especially from the robust demand for semiconductor equipment seen to-date," said Mr Gan.

While NODX to top markets as a whole rose in May, exports to the United States, Japan and the European Union declined.

Exports to China saw the biggest gains at 36.9 per cent, following the 55.5 per cent expansion in April due to specialised machinery, petrochemicals and disk media products.

Coming in second was NODX to Hong Kong, which expanded 30.2 per cent, extending the previous month's 30.9 per cent growth. This was attributed to integrated circuits, non-electric engines and motors and telecommunications equipment.

This was followed by a 27.1 per cent rise in exports to Malaysia, moderating from the 57.2 per cent expansion seen in April, due to specialised machinery, petrochemicals as well as diodes and transistors.

"Given the strengthening exports to Singapore's key trading partners, this also suggests that trade demand in the region as a whole has continued to stay buoyant, a remarkable feat despite the rise in Covid-19 infections in several economies," said Mr Gan.

Meanwhile, exports to emerging markets jumped 41.1 per cent in May, slowing from the 70.4 per cent expansion in the previous month.

On the whole, total trade grew 30.9 per cent in May, extending April's 26.3 per cent growth. Total exports rose 29.8 per cent, while total imports grew 32.2 per cent.

On a month-on-month seasonally adjusted basis, however, total trade fell 0.8 per cent in May, continuing April's 2.6 per cent decline.

The level of total trade after seasonal adjustment reached S$95 billion in May, slightly lower than April's S$95.8 billion.