March exports rise the most in more than 3 years

SINGAPORE — The Republic’s key exports rose last month at the fastest pace in more than three years, boosted by a surge in shipments to the European Union and the United States, but economists warn the stellar performance is not likely to be sustained.

Non-oil domestic exports (NODX) surged 18.5 per cent last month from March last year, easily beating the average market forecasts of a 0.7 per cent decline, said trade-promotion agency International Enterprise Singapore yesterday. It was also a sharp turnaround from the 9.7 per cent decline in February and the best growth rate since February 2012.

“The jump in figures for the month’s exports was due to the low base effect from a year earlier, as the increase in the first and second largest segments in exports — integrated circuits and pharmaceuticals — saw a huge growth for the month,” said UOB economist Francis Tan.

The double-digit growth was also driven by one-off boosts in exports of products such as ship structures as well as non-electronic engines and motors.

“It was more of a wild card: The increase of exports in structures of ships and boats most likely were led by a gigantic order, probably from the offshore marine companies such as Sembcorp and Keppel Corp,” said Mr Tan.

“Most did not think there would be a bounce in export numbers as the regional export data were lacklustre. Going forward, next month would most likely see more rational figures,” said Credit Suisse economist Michael Wan.

Exports of electronic products grew by 10.4 per cent, swinging from the 12.5 per cent decrease in the preceding month. The growth was led by a 24.4 per cent increase in shipments of integrated circuits and a 123 per cent rise in those of personal computers.

Non-electronic exports expanded 21.6 per cent last month after the 8.5 per cent drop previously. The expansion was led by a 65.9 per cent jump in pharmaceutical shipments, a 337.6 per cent surge in structures of ships and boats, and a 433.7 per cent rise in non-electric engines and motors.

By destinations, NODX to the European Union jumped 56.2 per cent after a 2.8 per cent decline previously, while shipments to the US accelerated to 19 per cent growth from 7.5 per cent. NODX to China, Singapore’s largest trading partner, gained 1.1 per cent after the 22.7 per cent plunge in February that was largely because of the Chinese New Year holidays.

OCBC economist Selena Ling is positive that Singapore can achieve its economic growth target for the year.

“While one month of strong NODX does not signify spring, nevertheless the Singapore economy should be able to achieve the moderate 2 to 4 per cent growth forecast for 2015,” she said.