Singapore’s non-oil domestic exports (NODX) expanded by 12.3% y-o-y in September, extending the 2.7% y-o-y growth in August and beating the 8.4% penciled by private-sector economists in a Bloomberg poll.
This marks the tenth consecutive month of NODX expansion.
According to official data released on Oct 18 by trade agency Enterprise Singapore (ESG), the higher growth was underpinned by expansion in both electronics and non-electronics sectors.
Electronic NODX grew 14.4% y-o-y in September, extending the 16.7% increase in the previous month, driven by integrated circuits (ICs), personal computers (PCs) and telecommunications equipment that rose by 7%, 45.4% and 45.4% respectively.
Non-electronic NODX grew 11.7% y-o-y, reversing from the 1.4% decline in August. The growth was driven by petrochemicals (+52.8%), specialised machinery (+34.9%) and pharmaceuticals (+27.3%).
On a seasonally adjusted m-o-m basis, NODX grew 1.2% in September, reversing from the 3.5% decrease in August. The level of NODX reached $15.7 billion, higher than the previous month’s $15.5 billion.
NODX to the top ten markets as a whole rose in September, with China (+38.9%), the US (+22.2%) and South Korea (+61.6%) as the largest contributors. However, NODX to the EU 27, Malaysia and Thailand declined.
NODX to China expanded after the 17.6% contraction in August due to non-monetary gold, petrochemicals and ICs. Meanwhile, NODX to the US was underpinned by pharmaceuticals , specialised machinery and miscellaneous manufactured articles, while NODX to South Korea was driven by specialised machinery, ICs and telecommunications equipment.
NODX to emerging markets expanded by 41.4% y-o-y in September, jumping from the 2.7% growth in August. The growth in NODX to emerging markets was mainly due to South Asia (+62.6%), CLMV (+32.4%) and the Middle East (+46.0%).
See also: NODX expands 2.7% in August, as low base effect tapers off
Singapore’s non-oil re-exports (NORX) expanded by 16.4% y-o-y in September following the 19% increase recorded in August, driven by growth in both electronics and non-electronics.
Electronic NORX grew 18.6% y-o-y in September, easing from the 29.3% growth in August. The growth was largely due to ICs (+26.1%), capacitors (+48.2%) and other computer peripherals (+37%).
Non-electronic NORX grewy 13.8% y-o-y for September following the 6.6% increase in August, largely due to non-monetary gold (+205.5%), specialised machinery (+60%) and nickel.
NORX to the top ten markets grew in September with the exception of South Korea and Japan. The top three contributors to NORX growth were China (+34%), Hong Kong (+22.7%) and Malaysia (+19.0%).
On a seasonally adjusted m-o-m basis, NORX declined 0.4%, easing from the 7.5% growth in August, underpinned by a decline in electronic NORX. The level of NORX reached $27.6 billion in September, lower than the $27.7 billion in August.
Following the September data, UOB economist Barnabas Gan has upgraded his 2021 NODX growth forecast to 9.5%, up from 8% previously and higher than the 7-8% projected by ESG.
"Singapore’s key export destinations in Asia broadly saw higher year-on-year shipments in value-terms despite the COVID-19 risks in the region. This suggests that Asia’s path towards an endemic-Covid-19 environment is gaining traction, amidst the region’s economic recovery from the 2020’s troughs," he explains. Gan believes NODX will expand by 9.5% in the 4Q2021, underpinned by export growth momentum seen year to date and the low base in 4Q2020.
Selena Ling, head of treasury research and strategy at OCBC Bank, highlights that Singapore’s NODX has already risen 10.8% y-o-y on a year-to-date basis for the first 9 months of 2021. Nonetheless, she has reduced her full-year 2021 NODX growth forecast to finish between 10.5-11.0% y-o-y in anticipation of the supply chain disruptions.
"The NODX moderation is likely to extend into 2022 where we expect NODX to expand at a reduced pace of 4-5% y-o-y, with a potential slow start in 1H2022 due to the supply chain disruptions before they abate to give way to a stronger finish by end-2022," she adds.
Maybank Kim Eng has maintained its NODX growth forecast for 2021 at 9%. "Exports will likely remain buoyant in the fourth quarter, supported by strong chip demand and the reopening of more countries in the region, including Malaysia, Indonesia and Thailand," say analysts Chua Hak Bin and Lee Ju Ye.
However, the analysts also highlight that downside risks remain as trade-reliant Singapore is not immune to a slowdown in China. "Supply chain bottlenecks and elevated global container freight rates may dampen manufacturing and trade," they caution.