S’pore exports expand again, but shadow of protectionism looms

SINGAPORE — Shipments of locally produced goods rose for a second consecutive month in December on an annual basis, boosted by solid performances in both the electronic and non-electronic sectors, but the late surge was not enough to help Singapore avoid a fourth year of decline in exports. 

On a year-on-year basis, non-oil domestic exports (NODX) grew 9.4 per cent last month, trade agency International Enterprise (IE) Singapore said on Tuesday (Jan 17). The figure extended the 11.5 per cent growth in November  — which was then a strong rebound from October’s contraction of 12 per cent — and also beat economists’ expectations for a 5.8 per cent rise. On a month-on month seasonally adjusted basis, NODX rose 1 per cent last month, slowing from the revised 13 per cent expansion in November. 

“Given that Singapore is the canary in the coal mine, today’s positive NODX print corroborates recent trade data which showed a notable rebound in exports in most Asian countries. This suggests the tentative end of the trade recession which has plagued the region since late 2014,” said ANZ economist Ng Weiwen.

Analysts said the past two months of strong NODX data bode well for Singapore’s exports this year, but also warned that the rebound is in a “nascent stage” and could be derailed by geopolitical tensions and a rise in protectionism. 

“With the December trade numbers released today, Singapore’s 2016 NODX contracted 3.2 per cent, marking the fourth full year of NODX decline,” said UOB economist Francis Tan. 

“We are carefully watching the negative impact from the anti-globalisation rhetoric that has been fuelling developed markets’ sentiment. One country to watch out is still the United States. In a paper by the Ministry of Trade and Industry, the US is the second largest source of final demand of the goods produced in Singapore, and further trade-protectionist measures will only hurt the path of our export recovery,” he added.

The global economy will face “disastrous consequences” if US protectionist measures proposed by incoming President Donald Trump prompt trade wars, Mr Ravi Menon, managing director of the Monetary Authority of Singapore, said on Monday. Some of the possible actions — such as rejecting a US-Pacific trade deal, extra taxes on US importers and labelling major trade partners as currency manipulators — may attract retaliatory measures, he warned.

Singapore’s exports got a boost last month from shipments of electronics, which rose 5.7 per cent from the same period a year ago, up from the 3.5 per cent increase in November. The increase was largely due to shipments of integrated circuits, personal computer parts and consumer electronics.

“As we highlighted previously, we anticipate that global demand for OLED (organic light-emitting diode) displays, dual-lens cameras, fingerprint technology and touch screens could remain key industry drivers in 2017 and sustain the manufacturing momentum for the first half of 2017,” said Ms Selena Ling, head of treasury research and strategy, OCBC Bank.

Exports of non-electronics expanded by 11.3 per cent, slowing from the 15.3 per cent rise in the previous month, with shipments of specialised machinery, petrochemicals and primary chemicals contributing the most to the sector.

Shipments to China, Singapore’s largest export destination, jumped 33.5 per cent in December after November’s 15.8 per cent increase, on the back of stronger petrochemicals and primary chemicals exports. Exports to Taiwan rose 54.8 per cent, up from 35.8 per cent growth in the preceding month, while exports to Hong Kong increased 20.6 per cent in December, following the 38.1 per cent rise in November. Shipments to the US fell 16.4 per cent in December, after having risen 3 per cent in the month earlier.