Singapore’s key exports rebound in November, buoyed by electronics
A 23.2% year-on-year surge in electronic shipments is due mainly to integrated circuits and disk media products
SINGAPORE’S key exports rebounded in November on the back of a jump in electronic shipments, to the surprise of analysts who had expected further decline.
Non-oil domestic exports (NODX) grew 3.4 per cent year on year (yoy) last month, turning around from the revised 4.7 per cent contraction in October, data from Enterprise Singapore (EnterpriseSG) showed on Tuesday (Dec 17).
Private-sector economists polled by Bloomberg had expected a 1 per cent year-on-year contraction instead.
On a seasonally adjusted monthly basis, NODX expanded 14.7 per cent in November to S$15.5 billion, recovering from the previous month’s 7.5 per cent decline.
UOB associate economist Jester Koh said November’s NODX, non-oil re-exports data, as well as improvements in the new export orders sub-index in November’s Purchasing Managers’ Index served as evidence for a front-loading of exports ahead of US president-elect Donald Trump’s proposed tariffs.
The improvement in NODX was helped by a 23.2 per cent year-on-year surge in electronic exports, largely attributed to intregrated circuits and disk media products.
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Economists said the strong electronics performance was driven by the ongoing recovery in the tech cycle, and is likely to continue supporting exports into next year.
“This will be underpinned by sturdy external demand for Singapore’s electronics products, which can be observed from the ongoing multi-month expansion in electronics new export orders that is benefiting from the rising adoption of artificial intelligence (AI) applications in consumer devices amid an ongoing replacement cycle,” said DBS economist Chua Han Teng.
However, UOB’s Koh cautioned that Singapore’s electronics exports growth may peak in the months ahead.
This is because the electronics cycle in South Korea and Taiwan, which serve as a bellwether for the region, have “convincingly peaked sometime in Q3” and are tipping into a down cycle.
Meanwhile, non-electronic shipments shrank by 1.6 per cent yoy, which was due to the typically volatile pharmaceutical segment, as well as petrochemicals and paper and paperboard.
DBS’ Chua said the softness for pharmaceuticals was expected, considering the weaker new export orders for Q4, compared to Q3, according to the Economic Development Board’s business expectations survey in October.
Overall, total trade increased by 5 per cent yoy last month as both exports and imports rose.
NODX to half of Singapore’s top 10 key markets grew in November, while the rest declined.
Shipments to Taiwan recorded the largest increase at 42.7 per cent yoy, followed by Hong Kong at 35.3 per cent.
Exports to the United States, China and Japan fell by the largest extent.
Even so, UOB’s Koh said on a six-month moving average basis, November’s performance marked a “significant improvement” compared to that in Q2 and Q3.
This, he noted, was supported by the ongoing lowering of policy rates by major central banks, which could cushion any slowdown in investment and consumption activity in their respective economies.
He added that exports to China remained tepid, reflecting the “still weak” consumer sentiment there.
Looking ahead, RHB associate research analyst Laalitha Raveenthar said she remained cautious on Singapore’s export performance amid geopolitical uncertainties and Trump’s protectionist policies, which may curtail global growth and trade next year.
“As a small, open economy heavily reliant on trade, Singapore will be impacted by potential US-led protectionist policies under the Trump administration, but likely from a second-order perspective,” she noted.
She added that she is keeping her NODX outlook at 1 per cent for 2024 and 2 per cent for 2025.
Last month, EnterpriseSG narrowed its 2024 outlook to “around 1 per cent”, from an earlier forecast of 4 to 5 per cent, due to a worse-than-expected recovery.
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