Singapore exports down 20.6% in December in third straight month of contraction

SINGAPORE’S non-oil domestic exports (NODX) contracted again in December, dragged by declines in non-electronic shipments and declining deliveries to most of the Republic’s top 10 key markets, data from Enterprise Singapore (EnterpriseSG) showed on Tuesday (Jan 17).

Non-oil domestic exports (NODX) in December tumbled 20.6 per cent year on year from a high year-ago base, extending the 14.7 per cent fall in the previous month and marking the third consecutive month of decline.

December’s performance was lower than what private-sector economist had expected – a 17.5 per cent contraction year on year, according to a Bloomberg poll.

On a seasonally-adjusted monthly basis, NODX shrank by 3.3 per cent in December, extending the 9.2 per cent decline in the preceding month. Both electronic and non-electronic NODX contracted. On a seasonally-adjusted basis, the level of NODX was S$13.9 billion in December, lower than in November (S$14.3 billion), the same period a year ago (S$17.2 billion) and 2021’s average (S$16.1 billion).

The sharp decline in NODX may result in a downward revision in Singapore’s final fourth-quarter gross domestic product figures for trade-related services such as wholesale trade and water transport, said Maybank economists Chua Hak Bin and Lee Ju Ye in a research note.

“We expect the downturn in manufacturing and trade-related services to extend into the first half of 2023 as external demand deteriorates for both electronics and non-electronics,” they added.

Barclays economist Brian Tan said that the weak December print reinforces the view that the Monetary Authority of Singapore will not tighten monetary policy in 2023, thus ruling out any off-cycle moves as well.

The shipment of electronic products fell 17.9 per cent year on year in December, against the previous month’s 20.2 per cent contraction. Contributing most to the fall in electronic NODX was integrated circuits (-26 per cent), disk media products (-36.5 per cent) and PC parts (-41.7 per cent).

Non-electronic exports also declined by 21.3 per cent in December, extending November’s 12.8 per cent decline. Non-monetary gold (-63.3 per cent), specialised machinery (-16.6 per cent) and primary chemicals (-55.6 per cent) contributed the most to the decline in non-electronic NODX.

The latest NODX print comes after Singapore’s manufacturing Purchasing Managers’ Index (PMI) resumed its downward trajectory in December, dipping 0.1 point to 49.7. The electronics sector PMI also slipped 0.3 point from the previous month to post a faster contraction at 48.9.

NODX to Singapore’s top 10 markets shrank as a whole in December, dragged by declines in deliveries to mainland China (-31.8 per cent), Indonesia (-35.4 per cent) and Hong Kong (-34.6 per cent).

Exports to the United States and the eurozone, which saw growth in November, experienced year-on-year declines in December.

Shipments to the European Union fell by 3.7 per cent in December, compared with a 7.3 per cent growth in the previous month, while exports to the US declined 1.9 per cent, down from November’s 0.5 per cent growth.

Exports to Taiwan declined further in December by 17 per cent, extending the previous month’s 3.8 per cent fall.

The best-performing market was South Korea, which saw shipments grow by 14.3 per cent in December, a reversal from the 5.4 per cent decline in November.

On the whole, total trade fell by 7.7 per cent year on year in December, extending the previous month’s 2.4 per cent decline. Exports were down 7.1 per cent, while imports declined by 8.2 per cent.