SINGAPORE (July 17): Defying expectations of a slowdown from the Covid-19 outbreak, Singapore’s non-oil domestic exports (NODX) reversed out of the red in June thanks to a low base from the year before.

Official figures released by trade agency Enterprise Singapore (ESG) on Friday showed a 16.1% year-on-year expansion in June, compared to the surprise 4.6% slowdown logged in May. 

June’s showing resoundingly surpassed the 8% growth estimated by private-sector economists in a Bloomberg poll.

Specifically, the increase was led by a 14.5% growth in non-electronic shipments, a significant expansion from the 9% decline logged in May. A substantial boost came from the 238% surge in non-monetary gold, as the precious metal is deemed a safe-haven asset in this downturn, ESG observed.

Increased shipments of specialised machinery (+45.9%) and pharmaceuticals (+30.8%) also provided a lift to the segment’s growth.

Meanwhile, the linchpin electronics sector widened its expansion by 22.2%, from the 12.4% growth registered the month before. The improved performance follows higher exports of disk media products, telecommunications equipment and ICs by 59.8%, 37.8% and 29.1% respectively.

On a month-on-month seasonally adjusted basis, NODX was up a smidgen 0.5%, reversing from the previous month’s 4.6% decline. “The growth in non-electronic domestic exports outweighed the decline in electronics,” ESG explains, Still June’s NODX came in at $14.2 billion, similar to May.

Even so, Singapore’s NODX to its top 10 markets grew in June, with exports to Japan (+94.7%), South Korea (+85.6%) and Taiwan (+32.6%) leading the way.

Interestingly, the growth in NODX to Japan, expanded from May’s 52.9% expansion and comes from heightened exports of pharmaceuticals (+407.4%), synthetic rubber & waste and PCs (+50.4%).

Similarly, the growth in NODX to South Korea surged from the previous month’s 24.2% expansion and follows higher shipments of specialised machinery (+270.9%), measuring instruments (+234.7%) and ICs (+187.2%).

On the contrary, NODX to Indonesia (-17.8%), Hong Kong (-21.0%), and Emerging Markets (-28.8%) staged declines, possibly due to the movement control restrictions from Covid-19.

Meanwhile, June saw a 5.5% increase in non-oil re-exports (NORX), reversing from the 16.0% decrease posted in April. This follows a 21.0% growth in electronic shipments (+21.0%). A further boost was mitigated by the8.4% decline posted by non-electronic exports.

In this time, NORX to the top 10 markets increased, with the top contributors being Hong Kong (+22.6%), the EU 27 (+40.9%) and Vietnam (+29.4%).

Overall, total trade was down 6.6% in June, easing from the 25.0% contraction registered the previous month. Total exports dipped 3.6% easing from May’s 23.9% decrease while total imports narrowed from May’s 26.2% to dip 9.9% in June.

Economists unanimously say that June’s NODX surpassed their expectations, with OCBC Bank’s chief economist Selena Ling noting that this “heralds well for the restarting of the economic engine after the circuit breaker”.

“Barring a return to national lockdowns around the globe which appear less likely, full-year 2020 NODX growth is likely to be positive and outperform ESG’s forecast of -1% to -4% year-on-year,” she adds.

UOB economist Barnabas Gan meanwhile, has upgraded his full year forecast for the metric to +4% . “This is in view of the relatively strong performance in NODX at 6.0% in 1H20, amid expectations for Singapore’s economic fundamentals to improve into 2H20,” he reasons.

Specifically, he expects pharmaceutical exports to be the key growth driver. “Singapore’s move to build up its diagnostics, vaccines and therapeutics development, as well as bolster vaccine manufacturing capacity in 2H20 are clear evidences for strong biomedical production and export momentum in the foreseeable future,” stresses Gan.