Singapore key exports disappoint after 2.7% rise in September misses expectations
NODX growth is slower than the 9.1% expansion anticipated by private-sector economists
SINGAPORE’S key exports continued its upward climb in September as both electronics and non-electronics shipments rose, but the rise was at a slower pace than what analysts were expecting.
Non-oil domestic exports (NODX) grew 2.7 per cent year on year in September, extending the 10.7 per cent jump in the previous month, data from Enterprise Singapore (EnterpriseSG) showed on Thursday (Oct 17).
This missed private-sector economists’ expectation of a 9.1 per cent expansion, as indicated in a poll by Bloomberg.
On a seasonally adjusted monthly basis, NODX rose 1.1 per cent – a turnaround from the previous month’s 4.7 per cent decline – to reach S$14.9 billion in September. This was higher than the previous month’s S$14.7 billion, and the average level a year ago.
The pullback in September’s NODX growth was due to a sharp moderation in electronics shipments, as well as slower growth in non-electronics exports.
Shipments of electronic products grew 4 per cent, a significant slowdown from August’s 35.1 per cent surge. The expansion was mostly led by disk media products (64.6 per cent), PCs (55 per cent), and integrated circuits (4.8 per cent), said EnterpriseSG.
Meanwhile, non-electronics shipments expanded 2.3 per cent, extending August’s 3.6 per cent rise, but at a slower pace. Pharmaceuticals (35 per cent), specialised machinery (12.9 per cent) and other speciality chemicals (46.2 per cent) contributed the most to growth.
Weakening electronics recovery
The recent sell-off in global technology stocks reflects fading confidence in overall electronics recovery, said OCBC chief economist Selena Ling.
“It is a challenging period for the global chip industry, as ASML’s – the bellwether for the wider chip industry – cut in its earnings guidance illustrates the slow recovery in demand due to investor caution and push-out in orders from 2025 to 2026,” she added.
Moreover, geopolitical tensions may mean greater uncertainties ahead for high-stakes strategic industries such as semiconductors, said Ling. This is especially so against the backdrop of the upcoming US elections, coupled with the fact that key US lawmakers are lobbying the Biden administration to block Huawei suppliers from purchasing chip-making equipment.
Factoring in the weaker-than-expected September data, Ling maintained that full-year 2024 NODX growth “is likely to undershoot the 4 per cent forecast handle”.
UOB associate economist Jester Koh noted that the electronics export data from other key markets, such as South Korea and Taiwan, also suggests that the sustained upturn in electronics could peak in the months ahead.
The electronics cycle in both countries seemed to have peaked sometime in the third quarter of this year and is “seemingly on the cusp of a downcycle”, added Koh. This may hint that Singapore’s electronics NODX growth could embark on a similar downtrend in the months ahead.
DBS economist Chua Han Teng was more upbeat, believing that the electronics recovery trend remains intact based on the three-month moving average year-on-year growth data. On a three-month moving average, electronics NODX grew 18.6 per cent year on year in September.
“We continue to expect Singapore’s electronics firms to capitalise on the global technology upcycle, driven by the replacement of smartphones and PCs, as well as the broadening adoption of AI (artificial intelligence) applications,” he said.
RHB analysts Barnabas Gan and Laalitha Raveenthar also expect Singapore’s NODX momentum to still be on an “acceleration path” despite the slower year-on-year growth, and maintained that full-year NODX growth will come in at 1.5 per cent.
“We view that Singapore’s NODX will remain supported by continued expansion in the electronics sector, rebound in pharmaceutical exports and global growth continuing to benefit Asean’s export-oriented economy,” they noted.
Top markets
NODX grew for six out of Singapore’s top 10 markets, with Japan, Hong Kong and the United States bucking the trend. Meanwhile, NODX to China stayed flat for the month.
Exports to the EU27 clocked the most dramatic improvement with a 37.6 per cent jump year on year, turning around from the previous month’s 21 per cent contraction. EnterpriseSG attributed the growth to pharmaceuticals, other speciality chemicals and petrochemicals.
NODX to Indonesia, South Korea and Thailand also expanded at a faster pace in September than the month prior. NODX to Indonesia grew 52.3 per cent, compared with 18.5 per cent previously, while NODX to South Korea rose 34.9 per cent, compared with 20.3 per cent before.
Exports to Thailand nudged up a more modest 3.2 per cent in September, but still an improvement from the previous month’s 2.1 per cent growth.
Shipments to Malaysia and Taiwan eased compared with the previous month, even as growth remained positive. Meanwhile, exports to China were flat in September, compared with August’s 18.8 per cent growth.
In contrast, exports to Hong Kong shrank 37.1 per cent, a dramatic fall from the 70.6 per cent expansion recorded in August. NODX to Japan was down 11.4 per cent in September, contracting at a slower pace than the 29.6 per cent fall recorded the month prior, while NODX to the US shrank 20.8 per cent, reversing from the previous month’s 6.4 per cent growth.
“The pullback in NODX to key markets like China and the US, which is broad-based across both electronics and non-electronics exports, does not bode well for domestic demand in these major economies,” said OCBC’s Ling. This is notwithstanding the recent slew of stronger-than-expected economic data from the US, and the latest policy stimulus measures unveiled by China.
Overall, total trade inched up 0.5 per cent year on year in September, easing from the previous month’s 3 per cent growth. Sequentially, total trade rose 0.7 per cent, reversing from August’s 2.9 per cent contraction.
