Singapore’s key exports growth eases to 6.1% in December as pharma drags

[SINGAPORE] The Republic’s key exports rose by a slower-than-expected 6.1 per cent year on year in December, bolstered by electronics shipments but weighed down by pharmaceuticals, data from Enterprise Singapore (EnterpriseSG) showed on Friday (Jan 16).

The electronics boom is expected to continue supporting non-oil domestic exports (NODX) growth in 2026, economists said, with UOB raising its full-year projection.

The latest print marked moderation from several months of double-digit expansions: NODX grew 11.5 per cent in November; and 21.1 per cent in October. The median estimate for the latest print in a Bloomberg poll of private-sector economists was a 10.1 per cent jump.

Still, the December data brought full-year NODX to 4.8 per cent, higher than the “around 2.5 per cent” official forecast announced by the trade agency in November 2025.

Electronics leads

While electronics NODX “remained stellar” in December, pharmaceutical exports dragged, causing non-electrnics NODX to “nearly stall”, said OCBC chief economist Selena Ling.

Economists flagged the 36.3 per cent slump in NODX to the US, a reversal from a 106 per cent spike in November.

Electronics exports surged 24.9 per cent, following the preceding month’s 12.9 per cent rise.

“Artificial intelligence-driven data centre development supercharged demand for memory, storage, networking hardware and other electronic components,” said Maybank analysts Chua Hak Bin and Brian Lee.

EnterpriseSG said that integrated circuits (32.1 per cent), disc media products (53.5 per cent) and telecommunications equipment (81.4 per cent) led the expansion.

Growth for non-electronics shipments cooled to 0.8 per cent, following November’s 11.1 per cent climb. The main growth drivers were non-monetary gold (73.3 per cent) – “unsurprising given the ascent of gold prices in a volatile, uncertain, complex and ambiguous world”, said Ling – specialised machinery (5.4 per cent) and mechanical handling equipment (415.8 per cent).

Pharmaceuticals exports declined 7.8 per cent in December, after November’s 369.8 per cent expansion, Maybank’s duo flagged. They added that the US$4 billion in shipments in November were “abnormally high... more than the past three months combined, making a pullback inevitable”.

They believe that front-loading, prompted by US President Donald Trump’s “triple-digit pharmaceutical tariffs (which still have no concrete timeline)” has likely cooled off.

Electronics’ superior performance relative to non-electronics could sustain further in the near term, said DBS senior economist Chua Han Teng, adding that forward-looking purchasing managers’ indices (PMI) support this trend.

DBS’ Chua and the Maybank pair noted that electronics manufacturing PMI continued to outperform headline manufacturing PMI in December.

“The improvements in headline manufacturing PMI’s sub-indices were not broad-based, potentially signalling external headwinds for non-electronics exports and manufacturing, as the lagged impact of higher US tariffs globally bites,” DBS’ Chua added.

UOB associate economist Jester Koh said: “Notably, the uptick in the electronics orders-to-inventories ratio should bode well for electronics intellectual property in the months ahead.”

Majority in contraction

In December, NODX to six of Singapore’s top 10 markets contracted.

NODX to the US, Japan, Hong Kong, Indonesia, Thailand and the European Union declined on a yearly basis.

Among these markets, shipments to the US and EU had risen year on year in November.

DBS’ Chua attributed the reversal in the US to “plummeting and normalisation of non-electronics shipments, particularly highly volatile pharmaceuticals”.

Maybank’s team added that electronics NODX to the US, however, accelerated strongly.

NODX to China, Taiwan, Malaysia and South Korea charted growth.

The fourth straight month of expansion for NODX to China suggests “continued reflation amid demand for specialised machinery, measuring instruments and metal removing machine-tools”, said Ling. She and UOB’s Koh said that the upbeat NODX to Taiwan and South Korea reflects sustained AI-related tailwinds. The rise in NODX to Malaysia – in part due to demand for diodes and transistors – also suggests that the AI-related boom probably has legs to run, Ling added.

Higher predictions

For 2026, UOB raised its NODX growth projection to 3 per cent, from 1.2 per cent previously. OCBC forecasts that NODX will moderate to around 1 to 3 per cent. Maybank’s forecast stands at 3 to 4 per cent.

These predictions are all higher than EnterpriseSG’s projection range of 0 to 2 per cent.

Economists believe that the robust AI-driven exports could persist in H1 2026.

This, along with the substitution of US import demand from higher tariff countries will keep export growth firm at least in H1 2026, Maybank’s duo said.

They, alongside UOB’s Koh, noted expectations of higher spending from top US tech firms. The Maybank pair also highlighted a continued memory rally and price surges, as well as chip plant openings in Singapore.

“Most multinational corporation producers in Singapore are likely to enjoy exemptions from Trump’s threatened chip and pharmaceutical tariffs (which lack concrete timelines) on account of their US investment commitments,” they added.

But the team also acknowledged that tapering front-loading in pharmaceutical shipments could be a drag.

Ling noted the “relatively benign” macro backdrop and “some, albeit limited (against 2025)” room for central banks to ease monetary policy.

While she acknowledged geopolitical concerns over Venezuela, Iran and Greenland, she pointed out that financial markets have been “somewhat immune”, adding: “Even the threat to the Fed’s independence with the latest investigations into Fed chair Jerome Powell has not upended risk sentiments yet.”

Overall, total trade grew 12.3 per cent year on year in December, following the previous month’s 8.7 per cent rise. Total exports expanded 10.6 per cent, picking up from November’s 9.9 per cent; total imports grew 14.2 per cent, up from the preceding month’s 7.3 per cent.