Things are looking up for Singapore’s trade sector, with non-oil domestic exports (NODX) expanding in August 2020 for the third consecutive month.

Official figures released by trade agency Enterprise Singapore (ESG) on September 17 indicated a 7.7% year-on-year expansion in August, widening from the 5.9% growth logged in July.

August’s showing is ahead of the 3.3% expansion forecast by private-sector analysts in a Bloomberg poll.

Specifically, the increase was heralded by an 8.3% year-on-year surge in non-electronic shipments – a substantial increase from the 6.9% growth registered in July. This was fueled by higher exports of non-monetary gold (+55.1%) “amid media reports of increased demand for physical gold as a safe-haven asset in the global economic uncertainty and the Covid-19 [pandemic],” ESG states.

A further lift to the segment came from specialised machinery (+25.7%) and food preparations (+18.9%), due to a low base a year ago. The change came on a steep decline the year before, during the global down-cycle in the electronics sector, ESG states.

Similarly, the linchpin electronics sector widened its expansion by 5.7% in August, from the 2.8% increase seen in the previous month. The improved performance follows higher exports of ICs, disk media products and PCs by 7.1%, 11.8% and 15.2% respectively.

On a month-on-month seasonally adjusted basis, NODX expanded by 10.5% in August, a significant surge from the 1.2% growth registered in July. This follows growth in both electronic and non-electronic domestic exports, ESG observes.

This translated to $15.6 billion in takings for August’s NODX, up from the previous month’s $14.1 billion.

Singapore’s NODX to its top 10 markets grew “as a whole” in August, with exports to the EU27 (+30.2%), China (+24.5%) and the US (+14.1%) leading the way.

Interestingly, the increase in shipments to the EU27, comes after an 8.8% contraction in July. August’s improved performance is a result of higher exports of non-monetary gold, specialised machinery (+109.4%) and pharmaceuticals (+7.1%).

Exports to China saw a similar showing in August as it reversed from the 5.4% decrease in the preceding month. This was enabled by stronger exports of specialised machinery (+41.8%), non-monetary gold (+45.6%) and measuring instruments (+94.0%).

Conversely, NODX to the US – while in the green – is a contraction from the previous month’s 98.7% expansion. Still, the boost came from higher shipments of disk media products (+55.6%), food preparations (+58.4%) and ICs (+75.3%).

On the contrary, NODX to Indonesia (-21.9%), Hong Kong (-11.9%), Malaysia (-5.0%) and Thailand (-2.6%) staged declines, possibly due to the ongoing movement control restrictions imposed to curb the spread of Covid-19 infections.

Meanwhile, Singapore’s non-oil re-exports reversed from its 3.1% year-on-year contraction in July to a 0.1% increase in August, thanks to a substantial increase in electronic re-exports. The metric expanded by 12.4%, up from the 11.9% surge registered in July, following higher re-exports of ICs (+7.9%), telecommunications equipment (+21.3%) and parts of PCs (+39.7%).

A stronger performance of NORX was dampened by a 11.4% contraction in non-electronic products. Albeit a narrower contraction from July’s 16.3%, the poorer performance declines in the NORX of aircraft parts (-45.5%), piston engines (-69.8%) and structures of ships & boats (-98.8%).

On a seasonally adjusted month-on-month basis, NORX expanded by 10.0% in August, reversing from the previous month’s 2.1% decline. This equates to $23.9 billion in takings for August’s NORX, up from $21.7 billion in July.

In this time, NORX to the top 10 markets increased, with the top contributors being the EU 27 (+20.2%), the US (+12.5%) and South Korea (+20.4%).

Looking ahead, UOB economist Barnabas Gan expects pharmaceutical exports “to continue to shine for the rest of 2020” due to the uncertainty surrounding the Covid-19 health crisis. 

He adds that the low-base NODX prints seen in 4Q20 should further support the metric’s growth.

However, he cautions that Singapore’s petrochemical NODX may take a hit from the low oil prices which may be here to stay since the Organization of Petroleum Exporting Countries’ (OPEC) downgrade of global oil demand to 90.2 million barrels per day (mbpd) in 2020, from 95 mbpd previously.

Still, Gan is optimistic that full-year NODX will come in between 3% and 5%, up significantly from his previous forecast range of -1% and -4%.