Singapore NODX disappoints further, with October exports down 4.6%
Exports to the Republic’s top 10 markets down as a whole in the month
SINGAPORE’S key exports fell by 4.6 per cent year on year in October, disappointing both the market and the authorities, as non-electronic shipments decreased sharply, data from Enterprise Singapore (EnterpriseSG) showed on Monday (Nov 18).
October’s non-oil domestic exports (NODX) outright dashed the hopes of private-sector economists, who were anticipating a 4 per cent year-on-year growth, based on a Bloomberg poll.
Meanwhile, September’s NODX was revised by a fairly large extent to just 0.9 per cent year-on-year growth.
OCBC chief economist Selena Ling said: “Compared to the regional export performances in October, there were downside surprises for South Korea and Taiwan, but they were still in positive growth territory.”
She added that China’s exports had accelerated, while those of India, Indonesia and Vietnam remained resilient.
EnterpriseSG said October’s performance was “weaker than expected”. It noted that it was expecting NODX to come in below the “4 to 5 per cent forecast range” for the year, owing to a “weaker-than-expected recovery” in the second half of 2024.
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NODX performance was in negative territory for a large part of H1, and returned to positive growth in July. It then eased for the next three months.
On a seasonally adjusted monthly basis, NODX fell by 7.4 per cent in October, extending the 0.6 per cent decrease in the previous month, to a value of S$13.6 billion.
Non-electronic exports declined by 6.7 per cent year on year last month, undoing the 1.4 per cent increase in September. Specialised machinery, pharmaceuticals and petrochemicals contributed the most to this decline, said EnterpriseSG.
Electronic shipments grew by 2.6 per cent year on year in October, reversing from the 0.7 per cent decline in the previous month. This was helped mainly by integrated circuits and disk media products, said the agency.
While the electronics recovery may have buffered the decline in NODX in October, some analysts warned that momentum may be waning.
Maybank economists Chua Hak Bin and Brian Lee noted that upbeat readings of the purchasing managers’ index in October suggested that demand continues to expand but at a slower pace, indicating that growth in the fourth quarter may cool.
UOB associate economist Jester Koh noted a “slight pullback” in electronics NODX in the six-month monthly average, even if it remained robust.
But the electronics cycle in both South Korea and Taiwan, which serve as a bellwether for the region, “seemed to have peaked sometime in Q3 and is seemingly on the cusp of a downcycle”.
This, he said, hints at a similar downtrend for Singapore’s electronics NODX growth in the months ahead.
Exports to Singapore’s top 10 markets declined as a whole in October, even though half of these markets recorded positive growth.
Shipments to China contracted by the largest extent at 22.3 per cent year on year. This was followed by the eurozone at -21.4 per cent year on year, and Japan at -23 per cent on the year.
Exports to Taiwan grew by 20.4 per cent year on year, further improving from September’s 6.8 per cent.
Overall, total trade decreased by 2 per cent year on year in October, after a 0.4 per cent increase in the previous month.
Sequentially, total trade shrank by 1.8 per cent in October, compared with 0.6 per cent growth previously, with the level at S$102.2 billion.
Outlook
At least two economists said they were downgrading their full-year NODX outlook.
UOB’s Koh said he was pencilling in 0.5 per cent for NODX, down from 3 per cent previously; RHB’s associate research analyst Laalitha Raveenthar has lowered hers to 1 per cent, from 1.5 per cent.
Even so, most economists said they were maintaining their outlook for full-year gross domestic product.
OCBC’s Ling said her growth forecast was still at 3.3 per cent, following better-than-expected industrial production data in Q3.
Several economists also pointed out that NODX may receive a boost from the front-loading of exports in anticipation of tariffs by incoming US president Donald Trump.
“Trump’s re-election might provide some upside to goods exports demand from stronger US consumer demand and front-loading of export orders in politically sensitive sectors such as electronics,” said Sheana Yue, an economist at Oxford Economics.
“But demand from other advanced economies will probably remain sluggish, and the electronics cycle is set to come off the boil soon. Exports growth will probably be unremarkable in 2025,” she added.
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