Singapore upgrades 2026 key exports growth forecast to 14-16% on electronics-led H1 outperformance

[SINGAPORE] Enterprise Singapore (EnterpriseSG) has significantly raised the Republic’s non-oil domestic exports (NODX) forecast for 2026 to 14 to 16 per cent, from 3 to 5 per cent previously.

This upgrade was primarily underpinned by the better-than-expected NODX performance in the first half of the year, the agency said in its quarterly trade review on Tuesday (Aug 11) morning, noting that key exports grew by 18.6 per cent on the year in H1, the strongest first-half performance since 2010.

“NODX growth is expected to remain supported in H2 2026, though likely to moderate due to high-base effects,” it added.

In the second quarter, key exports growth came in at a stronger-than-expected 27.4 per cent, following the 9.6 per cent expansion in Q1.

The quarter’s performance was led by a record surge in electronics NODX, at 88.1 per cent in Q2, building on Q1’s 57.8 per cent.

This was driven by year-on-year increases in shipments of integrated circuits (91.9 per cent), disk media products (182.5 per cent) and PCs (79.8 per cent).

Non-electronics NODX grew by 8 per cent in Q2 after recording a 3.5 per cent contraction in Q1. EnterpriseSG attributed this to specialised machinery (36.2 per cent), pharmaceuticals (62.3 per cent) and measuring instruments (21.2 per cent).

Overall, NODX to Singapore’s top markets expanded in Q2, with Taiwan (90.4 per cent), the US (58.9 per cent) and South Korea (67.1 per cent) being the key drivers.

Total merchandise trade expanded 40.2 per cent in Q2, up from the 25.5 per cent growth in the previous quarter.

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Total services trade rose 9.9 per cent in Q2, following the 5.3 per cent increase in Q1.

EnterpriseSG said the economy has remained more resilient than expected, bolstered by sustained AI-related demand and capex spending.

It also noted positive near-term sentiments domestically.

“A strong double-digit net weighted percentage of firms – particularly in the electronics and precision engineering clusters – expect improved overseas deliveries in Q3 2026, at 49 per cent and 55 per cent, respectively,” EnterpriseSG said.

It also highlighted favourable pricing expectations: a net-weighted 34 per cent of semiconductors firms and 41 per cent of precision engineering firms expect higher average selling prices in Q3.

“Overall, a net-weighted balance of 12 per cent of manufacturing firms maintain a positive business outlook for H2 2026,” it said.

The agency said NODX growth should continue in H2, still supported by AI-related demand, as well as “favourable guidance from major electronics firms and firmer prices of key electronics products”. This factors in high base effects for the latter part of the year.

But it added that downside risks include the much-prolonged conflict in the Middle East and the higher tariffs imposed by the US.