SINGAPORE (Mar 17): Defying expectations of a slowdown from the Covid-19 outbreak, Singapore’s non-oil domestic exports (NODX) reversed out of the red in February following a growth in both electronics and non-electronics shipments.

Official figures released by trade agency Enterprise Singapore on Tuesday pointed to a 3% y-o-y growth in February, compared to a 3.3% decline in the previous month.

Singapore’s February export figures also beat the 4.6% decline forecast by private-sector economists in a Bloomberg poll.

Specifically, the increase was led by a 3.2% increase in non-electronic exports, following the 0.1% decline posted by the segment in January. This comes on the back of increases in the export of specialised machinery (+74.1%), pharmaceuticals (+23.7%) and non-electric engines and motors (+37.3%), the trade agency said.

Meanwhile, electronic exports were up by 2.5%, reversing from their 13.0% contraction in the previous month. This better performance was on the back of an increase in the exports of disk media products, capacitors and parts of ICs by 57.4%, 128.8% and 130.9% respectively.

On a month-on-month seasonally adjusted basis, NODX was down 4.8%, after the 4.5% growth logged in the previous month. This follows a dip in non-electronic exports, which was partially offset by a growth in electronic exports. Overall, February’s exports amounted to $14.0 billion, down from January’s $14.7 billion.

Economists attributed the y-o-y increase in February to a low-base effect, as Chinese New Year fell in February last year.

Aside from this, they note that the economies of US and Europe– two of Singapore’s key trading partners – may not yet have felt the effects of Covid-19 in February.

Singapore’s NODX to eight of its top 10 markets increased in February, with exports to Japan (+61.7%), EU28 (+43.0%) and the US (+23.5%) leading the way.

The growth in NODX to Japan follows a 3.4% decrease in January and comes from heightened exports of pharmaceuticals, non-electric engines and motors and specialised machinery. Similarly, NODX to EU28 expanded after the previous month’s 10.5% contraction, following increased exports of pharmaceuticals, capacitors and miscellaneous manufactured articles.

Meanwhile, NODX to China and Hong Kong fell 35.8% and 29.2% respectively, possibly due to Covid-19.

February also saw a 12.4% expansion in non-oil re-exports (NORX), following a 1.5% growth registered by the segment in January. This follows expansions in electronics and non-electronics NORX of 16.6% and 8.7% respectively.

The trade agency also noted that NORX to most of the top 10 markets grew in November, apart from China.

Overall total trade was up 5.7% in February, a significant turnaround from the 3.2% decline in the preceding month.  Total imports were up 9.4% following the previous month’s 0.9% decline, while total exports were up 2.4% in spite of January’s 5.3% decline.

With the exponential increase in the number of cases of the coronavirus across the world affecting global supply chains and in turn, trade patterns, economists postulate that Singapore’s exports and imports may take a hit.

“The rapid spread of the virus outbreak in Europe and US will likely hurt global demand,” say Maybank economists Chua Hak Bin and Lee Ju Yu. The two regions account for 12% and 13% of total NODX, respectively.

“The recent spike in Covid-19 cases in neighbouring countries including Malaysia, Indonesia and Thailand is triggering more drastic government measures and will dampen regional trade,” they add.

As such JP Morgan’s Asean economist Ong Sin Beng expects the impact of Covid-19 to hit this month’s non- Chinese exports and spill over to 2Q20. Meanwhile, he does not expect as significant a dip in Chinese exports as factories show signs of re-opening.

To this end, market watchers are expecting a contraction in full-year NODX, with OCBC’s chief economist Selena Ling looking a 2-4% y-o-y contraction while UOB’s Barnabas Gan predicts a 1% dip “amid a very fluid global and domestic Covid-19 situation”.