The Business Times

Singapore exports grow 11.4% in August; electronics shrink for first time since November 2020

Sharon See
Published Fri, Sep 16, 2022 · 08:51 AM

SINGAPORE’S key exports rose as a whole in August but electronics shipments contracted for the first time in nearly 2 years, data from Enterprise Singapore (EnterpriseSG) showed on Friday (Sep 16).

Non-oil domestic exports (NODX) grew 11.4 per cent year on year in August, faster than the previous month’s 7 per cent expansion, on the back of an increase in non-electronics shipments.

This turned out to be better than the 8.4 per cent growth private-sector economists had pencilled, according to a Bloomberg poll.

On a seasonally adjusted month-on-month basis however, NODX shrank 3.9 per cent in August, undoing the previous month’s growth.

This brings the value of NODX to S$17.1 billion in August, which is slightly lower than the S$17.8 billion reached in the previous month but still higher than the S$15.8 billion recorded a year ago.

Exports of electronic products fell 4.5 per cent year on year – the first decline since November 2020 – compared with the 10.3 per cent growth in July, The decline in shipments of integrated circuits, disk media products and parts of PCs contributed the most to the contraction.

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Economists noted that the weakness in electronic exports is not limited to Singapore, with a similar trend observed in South Korea and Taiwan.

Non-electronic exports however expanded by 16.9 per cent year on year in August, extending the 6.1 per cent rise in the previous month. This was helped by pharmaceutical exports, which grew 68.8 per cent, as well as structures of ships and boats, and food preparations.

Overall, NODX to Singapore’s top 10 markets rose as a whole but exports to China, Taiwan and Hong Kong declined.

Exports to the US surged 60 per cent in August, up from 10.9 per cent in the previous month, on the back of a rise in exports of structures of ships and boats and food preparations.

NODX to the eurozone jumped 57.3 per cent, extending the 22.9 per cent rise in July. Pharmaceutical exports grew a whopping 303.2 per cent, followed by telecommunications equipment at 170.1 per cent.

On the other hand, exports to Hong Kong shrank 31 per cent, compared with July’s 3.8 per cent contraction.

NODX to China contracted 18.2 per cent in August, extending the 21.3 per cent decline in the previous month.

On the whole, total trade eased to 26 per cent year on year in August from the previous month’s 30.5 per cent.

Sequentially, total trade declined 6.8 per cent, compared with July’s 2.9 per cent growth.

While economists said they were maintaining their 2022 NODX forecast for now, they also voiced concerns about the outlook ahead, with softer electronic exports likely to continue.

“Our 2022 NODX growth forecast remains at 6-8 per cent year on year but may come in at the lower end of this range given rising downside risk attached to the remaining months due to the deteriorating external outlook as flagged last month,” said OCBC chief economist Selena Ling.

She added that aggressive global monetary policy tightening due to persistent inflation amid energy and food security concerns will continue to dampen global trade and raise the strain on the global economy.

RHB senior economist Barnabas Gan is however more optimistic: “We pencil in some upside risks to our overall full-year NODX outlook on the back of non-electronic NODX, which had so far shouldered the bulk of export growth.”

He noted that non-electronic NODX in August had risen at the fastest pace since December last year, at 16.9 per cent year on year.

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