Singapore ups full-year trade outlook after non-oil exports rise 9.7% in Q1 2021

SINGAPORE has raised its full-year trade outlook for 2021, on the back of a "better-than-expected" showing in the first quarter.

Non-oil domestic exports (NODX) are projected to grow by 1 per cent to 3 per cent year on year, trade agency Enterprise Singapore (ESG) said on Tuesday. The latest range is up from the forecast of zero to 2 per cent expansion last affirmed in February.

Meanwhile, total merchandise trade is estimated to increase by 5 per cent to 7 per cent this year, better than the forecast of 2 per cent to 4 per cent in February.

In its report, ESG cited "favourable sector-specific output and export trends" in January to March, especially for electronics, specialised machinery and petrochemicals.

"Higher expected 2021 oil prices may support oil trade and in turn total trade," it added.

That's as NODX rose by 9.7 per cent in the first three months - reversing the dip of 0.5 per cent in the quarter before - on strength in both electronics and non-electronics.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Shipments of electronic products, which made up about one-fifth of NODX, were up by 14.8 per cent year on year, picking up from 2.6 per cent growth previously. The expansion was driven by integrated circuits, personal computers and telecom gear.

Meanwhile, non-electronic NODX gained 8.3 per cent in the first quarter, reversing the 1.4 per cent decrease in the three months prior.

Growth was led by specialised machinery, which ESG noted grew in line with "robust global semiconductor demand" and the performance of economies such as Taiwan.

The improvement was also fuelled by petrochemicals coming off a low base, from the global down-cycle in 2019 and 2020, as well as by export growth in primary chemicals.

NODX to Singapore's top 15 markets rose by 9 per cent overall in Q1 2021, despite declines in shipments to the United States, Japan, Thailand and the European Union.

Otherwise, on a seasonally adjusted, monthly basis, NODX was up by 17.7 per cent in the quarter, to S$48.9 billion.

Meanwhile, total merchandise trade grew by 4.9 per cent year on year, after falling by 5.1 per cent in end-2020, as non-oil trade growth offset the decline in oil trade.

Total services trade shrank by 10.1 per cent to S$123 billion, dragged down by a decline in service imports; lower travel receipts and maintenance and repair receipts on the export front; as well as a decrease in transport services exports.

There are still risks and uncertainties in the global economy, ESG warned in its outlook. But a pick-up in oil prices since its last forecast in February "may provide some support for our oil trade in nominal terms and in turn total trade in 2021", the agency said.

Separately, the Ministry of Trade and Industry has held steady its gross domestic product growth forecast of 4 per cent to 6 per cent for 2021, while citing economic uncertainties related to the Covid-19 pandemic.