Singapore’s non-oil exports jump by 16.1 per cent in June

SINGAPORE, Jul 17, 2020, BT. exports bounced back in June after a dip in May, on a low base in the year prior. Non-oil domestic exports (NODX) expanded by 16.1 per cent year on year, according to data from trade agency Enterprise Singapore (ESG) on Friday. The rebound followed a surprise slip in May, which was revised downwards to a 4.6 per cent contraction, The Business Times reported.

June’s showing resoundingly beat private-sector economists’ estimate of 8 per cent growth in a Bloomberg poll.

NODX was boosted by specialised machinery exports and the typically volatile pharmaceutical segment. Non-electronic shipments rose by 14.5 per cent overall, after a 9 per cent decline in May.

The growth was also driven by non-monetary gold, which surged by 238 per cent. ESG noted that physical gold has been a safe-haven asset amid heightened global economic uncertainty.

Meanwhile, the linchpin electronics cluster saw exports rise by 22.2 per cent on a rebound in integrated circuits from the trough during the electronics down-cycle in the year before.

The NODX surge came on both rising electronics demand and the reopening of global economies, according to Maybank Kim Eng economists Chua Hak Bin and Lee Ju Ye.

“Singapore’s performance is in line with the improving exports performance in the region, including Vietnam, Indonesia, and South Korea,” they said in a note.

NODX inched up by 0.5 per cent on a seasonally adjusted, monthly basis to S$14.2 billion, reversing the month-on-month fall of 4.6 per cent in May.

But the year-ago base effect drove most of the uplift, with Barclays economist Brian Tan noting that the month-on-month change in NODX notched only a partial recovery.

“There are also increasing signs that pharmaceuticals production, which had initially seemed to benefit from the Covid-19 outbreak, may be faltering, leaving less of a cushion for headline GDP,” he said. Singapore’s second-quarter gross domestic product is down 12.6 per cent year on year, in official estimates based on April and May data.

Mr Tan added: “In sequential terms, pharmaceuticals exports continued to collapse.”

That’s even though Selena Ling, chief economist at OCBC Bank, called pharmaceuticals “the silver lining for NODX this year”.

Its share of NODX rose to 13 per cent in the six months, from 10 per cent in the year before, which she attributed to pandemic-driven benefits such as an increase in test kit production.

NODX to most of Singapore’s top 10 markets grew in 2020, led by Japan, South Korea and Taiwan, though shipments to Thailand, Indonesia and Hong Kong stayed negative.

Still, total trade slipped by 6.6 per cent year on year in June, with both exports and imports on the decline, as oil trade was dragged down by a continued slump in oil prices.

On a seasonally adjusted basis, total trade stood at S$74.2 billion, up by 5.2 per cent on May.

Said Ms Ling: “The June NODX data suggests that the worst may be over, but do not expect the double-digit NODX growth momentum to be sustained into H2 2020. The road ahead is yet to be completely smooth-sailing as external risks remain.”