Economists warn of continued uncertainty in export outlook after surprise 6.9% rise in September
The increase is led by a surge in electronics shipments
[SINGAPORE] Demand for more electronics exports, as well as US tariffs and trade tensions, could continue to affect Singapore’s key exports performance in either direction, said economists, with some more optimistic than others after an unexpected rebound in September.
The latest non-oil domestic exports (NODX) print marked a 6.9 per cent expansion year on year, reversing from the preceding month’s upwardly revised 11.5 per cent drop, data from Enterprise Singapore (EnterpriseSG) showed on Friday (Oct 17).
It also surprised private-sector economists – the consensus in a Bloomberg poll was for a 2.1 per cent fall on a yearly basis.
“The volatility of the monthly NODX data reflects the rapidly shifting global economic and trade environment,” said OCBC chief economist Selena Ling.
Jester Koh, UOB associate economist, noted that September’s NODX data aligns with the upticks in the new export orders sub-index of both the overall and electronics Purchasing Managers’ Index, while Brian Tan, head of non-China EM Asia economics research at Barclays, said it was “notably in line with similarly strong export figures” regionally, even after the US’ new reciprocal tariffs in August.
The impact from these higher tariffs “appear to be muted and short-lived”, said Maybank analysts Chua Hak Bin and Brian Lee.
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Year on year, electronics exports jumped 30.4 per cent, following the preceding month’s 6.5 per cent drop. The latest figure, which came on the back of low base effects, was the strongest expansion since August 2024. Integrated circuits (34.9 per cent), PCs (58.3 per cent) and disk media products (42.9 per cent) contributed the most to the expansion.
“This possibly reflects the diffusion of artificial intelligence (AI) technologies into consumer devices, along with attendant spillover effects on memory-related demand,” said Koh, while DBS senior economist Chua Han Teng noted still resilient external demand bolstered by positive AI-related developments and US tariff exemptions for such products.
Spillovers from global AI-driven investment demand have led to electronics’ “clear outperformance” relative to non-electronics, seen across various indicators, added Koh.
Non-electronics shipments rose 0.4 per cent, after August’s 13.3 per cent tumble. The main growth drivers were non-monetary gold (82.7 per cent) and specialised machinery (14.1 per cent).
“The gold price rally reflected a mix of fundamental factors like the US product-specific tariff measures, Fed (US Federal Reserve) rate cuts, threats to Fed’s independence, looming US government shutdown, geopolitical uncertainties and leadership changes, as well as sentiment-driven demand and momentum buying,” said Ling.
Uncertain outlook
For the first nine months of 2025, overall NODX growth was 2.2 per cent year on year.
Ling warned that, with the recent re-escalation of US-China trade tensions, “we should probably brace for more stops and starts”.
Maybank’s team said manufacturing and export growth will likely turn positive in Q4, after Q3’s slump.
They were relatively upbeat, highlighting support from the ongoing AI infrastructure boom, adding that industry players have noted the spread of AI from data centres to consumer devices, which will likely further boost demand for semiconductors and other electronics components.
“One notable example would be flash memory, with almost all of Micron’s NAND memory chips made in Singapore,” they said.
“Moreover, the company is set to open a new S$9.5 billion HBM (High Bandwidth Memory) chip plant in 2026, which will deepen Singapore’s foothold in the AI space.”
RHB group chief economist Barnabas Gan cautioned that there are “several trade-related questions we need answers to, but the truth may evade us for now”, referring to the legality of the US’ tariff policy, escalating US-China tensions, and uncertainty around sectoral tariffs.
But while risks remain, he said that “things are looking better”.
DBS’ Chua said Singapore’s non-oil re-exports (NORX), which serves as a better indicator of front-loading momentum, “demonstrated resilience”, while Koh marked the acceleration of electronics NORX.
Koh said that this suggests that front-loading effects may linger in anticipation of potential US semiconductor tariffs. Previously-announced 100 per cent US tariffs on branded or patented pharmaceutical products, which were planned to take effect from Oct 1, are now delayed, he added.
While Chua agreed that front-loading of electronics goods could continue until the threatened semiconductor tariffs are implemented, non-electronics front-loading is likely to wane, “amid the implementation of higher US reciprocal tariffs from August and a likely payback from an earlier boost”.
He believes that, despite September’s upside surprise, Singapore’s exports showed signs of easing in the third quarter though not a severe downturn.
“While the negative impact from US tariffs appears to be contained for now, we remain cautious on the outlook over the coming quarters as downside risks persist,” he said, flagging contentious US-China trade relations – with a re-escalation of tensions in October – and Trump’s sectoral tariffs.
OCBC’s Ling, meanwhile, predicts that October’s NODX print will be boosted by a low base, before moderation in the final two months.
NODX has performed better than expected year-to-date – “but it is still a question of whether the payback moderation post-front-loading has been delayed into 2026”, she said.
The bank forecasts NODX next year to reach between 1 and 3 per cent, “with the caveat of potential downside risk”, should US-China tensions remain heightened.
Performance by market
In September, key exports to all but three of Singapore’s top 10 markets rose.
The three markets for which NODX fell year on year were Indonesia (-10.7 per cent), the US (-9.9 per cent) and the European Union (-20.5 per cent). Indonesia and the US had marked double-digit falls in August, but the EU had double-digit year-on-year growth in the preceding month.
“Despite the positive headline NODX numbers, Singapore’s NODX to the US continued to be negatively hit by US reciprocal tariffs,” said DBS’ Chua, noting that September marked the fifth consecutive month of declines in NODX to the US.
“Notably, non-electronics domestic shipments to the US shrank by double-digits of 23.6 per cent year on year.”
In contrast, NODX to all other markets posted growth in September. This was led by Hong Kong at 56.3 per cent, followed by Taiwan (31.9 per cent) and China (10.1 per cent). Thailand also recorded double-digit growth.
Overall, total trade grew 14.9 per cent year on year in September, following the previous month’s 2.9 per cent increase. Total exports rose 15 per cent, up from August’s 1.8 per cent; total imports were up 14.8 per cent, up from the preceding month’s 4 per cent.
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