Growth projection for exports this year raised

SINGAPORE — The Republic’s non-oil domestic exports (Nodx) fell 2.8 per cent for the full year in 2016 — the worst showing since 2013, when exports shrank by 7.6 per cent. This compares with a 1.5 per cent gain in 2015.

However, the outlook for trade this year is looking up, following a surge in shipments in recent months, prompting trade agency International Enterprise (IE) Singapore to raise its growth projection for exports this year from the previous range of minus 1 to 1 per cent to between 0 and 2 per cent.

For the month of January, Singapore’s Nodx rose 8.6 per cent, extending the growth in the preceding two months, when exports increased by 9.1 per cent in December and 15.6 per cent in November. 

The surge in exports was due to an increase in shipments of both electronic and non-electronic products, IE Singapore said on Friday (Feb 17). Electronics exports in particular grew for the third straight month by 6.1 per cent in Januar year-on-year, while non-electronics exports also expanded by 9.9 per cent year-on-year.

Last year, electronics exports shrank 4 per cent, and non-electronic exports declined by 2.3 per cent.

The pick-up in recent months was a change from the weaker demand seen in the first three quarters of last year, which saw Nodx shrink by 9.6 per cent and 5.4 per cent for the first and third quarter, respectively. The second quarter of last year came in at a slight increase of 1.2 per cent while fourth-quarter growth was at 2.7 per cent.

“We think that Singapore’s exports will continue to recover in 2017, benefitting from the stronger global growth, particularly from a pick-up in global electronics demand, particularly semiconductors,” said economists at Maybank Kim Eng Research Chua Hak Bin and Lee Ju Ye.

In January’s Nodx report, exports to most of the top 10 markets increased, except for the European Union and Malaysia, and economists highlighted the striking surge for Nodx to China, Taiwan and South Korea, which saw a surge in both the export of electronics and non-electronics. 

This was an improvement from last year, when Singapore’s exports to eight of the top 10 markets declined, with the sharpest falls seen in shipments to China, Indonesia and Japan. Only exports to Hong Kong and Taiwan expanded.

“North-east Asia (is) driving Singapore’s exports ... China’s import recovery is expected to continue, which augurs well for Singapore as its largest export market is China,” said Mr Chua and Ms Lee.

IE Singapore noted in its 2016 trade report on Friday that the global economic outlook has improved and activities are expected to “pick up” in 2017, especially in developing economies. “Stronger activities are also expected of advanced economies by the IMF in its latest January 2017 World Economic Outlook Update.”

But the agency added that considerable uncertainties and risks such as the stance of the new US administration and geopolitical events may still weigh on global trade.