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Singapore exports jump 17% year-on-year

SINGAPORE — The Republic’s non-oil domestic exports (NODX) expanded above expectations in August, helped by growth in both the export of electronics and non-electronics.

Nodx rose 17 per cent year-on-year last month, extending the 7.6 per cent growth in the preceding month, International Enterprise (IE) Singapore said on Monday (Sept 18). Photo via Unsplash

Nodx rose 17 per cent year-on-year last month, extending the 7.6 per cent growth in the preceding month, International Enterprise (IE) Singapore said on Monday (Sept 18). Photo via Unsplash

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SINGAPORE — The Republic’s non-oil domestic exports (NODX) expanded above expectations in August, helped by growth in both the export of electronics and non-electronics.

Economists say the ongoing positive data suggests that NODX is likely to sustain a positive outlook for the annual forecast. Even so, the pace may look to simmer down at the tail end of this year going into next year, with a likely end to the tech cycle amid risks coming from slower growth in China.

NODX rose 17 per cent year-on-year last month, extending the revised 7.6 per cent growth in the preceding month, International Enterprise (IE) Singapore said on Monday (Sept 18).

Economists in a Reuters poll had expected the Republic’s exports to grow 11.8 per cent year-on-year.

“Exports continued their positive momentum in August, with electronic exports showing no signs of waning. NODX surged in August, driven by electronics exports. Non-electronics exports also accelerated as pharmaceuticals declined at a softer pace,” said Maybank Kim Eng economists Chua Hak Bin and Lee Ju Ye.

Mr Chua and Ms Lee note that the continued export momentum in July and August points to strong third quarter gross domestic product (GDP) growth for Singapore. 

With growth broadening to services, the economists see overall GDP growth for the third quarter coming in at around 3.5 per cent to 4.0 per cent — higher than the 3.1 per cent GDP forecast by private sector economists in a recent quarterly survey of professional forecasters conducted by the Monetary Authority of Singapore.

The ongoing positive data validates UOB economist Francis Tan in his decision to maintain a positive outlook on the overall NODX expansion for the year, supported by the continued growth in electronics exports. 

The bank maintains its NODX forecast for the year at 5.3 per cent, within the official NODX growth forecast of 5 to 6 per cent.

However, Mr Tan added that he does not expect the strong double-digit growth in semiconductors to sustain toward the end of this year and into early next year due to base effects. 

“The current electronics cycle may be coming towards an end with the rolling out of the next wave of smartphones in the months ahead,” he said. 

He also cautioned that the recent slowing growth in China, Singapore’s largest export destination, may pose some risk to Singapore’s NODX growth in the months ahead.

Due to the higher base effects of last year, Mr Tan expects NODX to go into negative territory in November, declining 2.9 per cent, and extending to a 3.2 per cent fall in December.

NODX to the top 10 markets expanded in August, with the exception of Taiwan. The largest contributors to the NODX increase were China, Hong Kong and South Korea. 

NODX to China expanded by 43.2 per cent from a year ago last month, with growth seen in both electronics and non-electronic exports. The increase was led by non-monetary gold, petrochemicals and integrated circuits. 

Shipment of electronics expanded by 21.7 per cent, following the 15.3 per cent growth in the previous month, helped by integrated circuits, integrated circuit parts and disk media products.

Non-electronic NODX rose by 15 per cent last month, following the 4.4 per cent growth in the previous month, helped by non-monetary gold, petrochemicals and specialised machinery.

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