Singapore key exports contract 9.8% in April in seventh straight month of decline
Elysia Tan
SINGAPORE’S non-oil domestic exports (NODX) shrank for the seventh straight month on the year in April, down 9.8 per cent, deepening from the previous month’s 8.3 per cent contraction, Enterprise Singapore’s figures showed on Wednesday (May 17).
The month’s key exports fall was marginally wider than the median 9.7 per cent drop forecast by economists in a Bloomberg poll. Both electronics and non-electronics continued to decline.
On a seasonally-adjusted monthly basis, NODX edged up 2.7 per cent last month, extending March’s 18.4 per cent growth. Sequentially, both electronic and non-electronic shipments expanded.
The value of key exports reached S$16.1 billion in April, up from S$15.7 billion the month before, though it remained lower than the year-ago period’s S$16.8 billion and 2022’s average of S$16.6 billion.
Year on year (yoy), electronic exports shed 23.3 per cent in April, following March’s 22.3 per cent contraction. Contributing most to the decline were integrated circuits (-21.1 per cent), PCs (-50.3 per cent) and disk media products (-41.6 per cent).
“Global electronics demand conditions may still be searching for a trough and the anticipated H2 2023 recovery for the global electronics industry looks elusive,” said OCBC chief economist Selena Ling. She noted that even the pharmaceuticals export surge – up 126.7 per cent yoy and up 7.8 per cent month on month, seasonally adjusted in April – was insufficient to offset the electronics slump.
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Pharmaceuticals were at the highest level on record, noted Maybank economists Chua Hak Bin and Lee Ju Ye, even as they added that the segment tends to be volatile, with low correlation between production and exports.
Non-electronic shipments, similarly, lost 5.8 per cent from the year-ago period, accelerating from the 4.7 per cent decline in the preceding month. Petrochemicals (-32.8 per cent), primary chemicals (-57.7 per cent) and food preparations (-27 per cent) were the main drivers of the fall.
The latest NODX print comes after the Singapore manufacturing sector’s Purchasing Manager’s Index remained in contractionary territory for the second consecutive month in April.
Overall, NODX to Singapore’s top 10 markets declined in April, mainly due to falls in shipments to China (-20.9 per cent), Malaysia (-35 per cent) and Taiwan (-27.5 per cent).
The weak China shipment reading “reinforced the weaker pace of China’s recovery post-reopening as illustrated by the set of disappointing Chinese economic data prints released yesterday”, said Ling.
The Maybank team agreed: “The boost from China’s reopening remains elusive as its recovery has largely been driven by domestic services, while manufacturing remains subdued.”
Shipments to all other top markets also marked falls, except for NODX to South Korea, the European Union (EU) and the US, which was up.
But Ling added that, given the latest weak expectations data for both the eurozone and Germany in a survey by Germany’s economic research institute ZEW, it remains to be seen if NODX demand from this market will sustain.
In line with the decline in NODX, total trade fell 18.8 per cent on the year in April, extending March’s 8.6 per cent decline. Exports dropped 18.1 per cent, while imports contracted by 19.5 per cent.
Both year-on-year rates of decrease were higher compared with the previous month, where total exports declined by 6.5 per cent and total imports fell 11 per cent.
On a seasonally-adjusted monthly basis, total trade also shrank by 3.6 per cent, reversing from the preceding month’s 7.9 per cent growth. Seasonally adjusted, the level of total trade reached S$100.3 billion, less than the previous month’s S$104 billion. Both exports and imports decreased.
While OCBC has maintained its NODX growth forecast at -3 per cent yoy, the Maybank duo has downgraded their projection to -9 per cent to -6 per cent, from -7 per cent to -4 per cent previously, “given the worse than expected performance in the first four months of the year”.
“Singapore may slip into a technical recession if the boost from China’s reopening fails to materialise in the second quarter,” Chua and Lee warned. “Probability of recession in Singapore in the next 12 months, as predicted by the US treasury spread, rose to 36.7 per cent in April from 30.2 per cent in March.”
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