Singapore exports post surprise 11.5% expansion in November

SINGAPORE — In a sharp turnaround, shipments of locally produced goods jumped unexpectedly last month as sales to major markets such as the European Union and China surged, but analysts say the rebound will not be enough to help Singapore avoid another year of a decline in exports. 

Non-oil domestic exports (Nodx) grew 11.5 per cent on a year-on-year basis last month, thanks to stronger shipments of both non-electronics and electronics, trade agency International Enterprise (IE) Singapore said on Friday (Dec 16).

The increase, a reversal from the 12 per cent contraction in October, beat economists’ expectations for Nodx to contract by 3 per cent.

Despite the surprisingly strong November performance, the increase will not be enough “to change the fate of a fourth full-year of decline”, said UOB economist Francis Tan. The official forecast for Nodx this year is for a contraction of between 5 and 5.5 per cent. 

November’s exports got a boost from shipments of electronic products, which rose 3.5 per cent from the same period a year ago, compared with the 6 per cent decline in October. The increase was largely due to shipments of integrated circuits, personal computer parts and disk media products.

Exports of non-electronics expanded by 15.3 per cent, reversing the 14.6 per cent decline in the previous month, as sales of pharmaceuticals, specialised machinery and petrochemicals rose.

By geography, shipments to seven of the Singapore’s top 10 markets rose last month, with the European Union, Hong Kong and China accounting for the largest increases. Exports to Japan, Thailand and Indonesia fell.

Shipments to China, Singapore’s largest export destination, jumped 15.8 per cent in November, reversing from the 0.1 per cent decline in the preceding month, on the back of stronger petrochemicals, disk media products and primary chemicals exports.

Exports to the EU expanded by 48.3 per cent, in contrast to the 28.6 per cent decline a month earlier, while shipments to Hong Kong rose 38.1 per cent, extending the 7.4 per cent growth in the preceding month.

“The better exports reinforce the probability of us not having a technical recession,” said Mr Tan. There are signs of “green shoots” next year and Nodx could finally break the contractionary barrier and expand 0.7 per cent, he added.

Final gross domestic product data from the Ministry of Trade and Industry last month showed that the economy shrank 2 per cent on a seasonally adjusted annualised basis in the third quarter. But the Republic should be able to avoid a technical recession — defined as two consecutive quarters of contraction — with “modest” economic growth projected for the final quarter of the year, supported by sectors such as electronics, information and communications and other services industries, Permanent Secretary (Trade and Industry) Loh Khum Yean previously said. 

However, CIMB Private Banking economist Song Seng Wun said that any recovery is still tentative as he “still sees unevenness”. 

“At the end of the day, consumers are still selective. If we look at December’s PMIs, it looks like economic activities in developed markets have picked up. If it is sustained for the coming next quarter, we will likely see the recovery in exports gather speed. But there are still a lot of headwinds. The unpredictability of (United States) President-elect Donald Trump’s policies could still see uncertainty in consumption.”