Singapore’s non-oil domestic exports (NODX) for the month of October fell by 4.6% y-o-y and 7.6% on a m-o-m seasonally adjusted basis.
This was weaker than the estimates of the Bloomberg consensus, Oversea-Chinese Banking Corporation (OCBC) and United Overseas Bank U11 (UOB), who expected Singapore’s October NODX to expand by 4%, 2.5% and 2.6% on a y-o-y basis respectively.
October’s NODX performance was the “worst” since June’s, bringing NODX for the year-to-date to a 0.1% contraction on a y-o-y basis, notes OCBC economist Selena Ling in her Nov 18 report. She adds that should Singapore’s November and December NODX grow by 6.2% y-o-y, the country’s NODX growth for the year will only grow by a “tepid” 1% on a y-o-y basis. In her Oct 17 note for September’s NODX previously, Ling believes that Singapore’s full-year NODX growth is likely to go below her forecast of 4%.
UOB economist Jester Koh has downgraded his full-year 2024 NODX growth forecast to +0.5%, from 3% previously, lower than the official forecast range of 4% to 5% with the October external trade report noting NODX performance has been “weaker than expected”.
Meanwhile, Oxford Economics economist Sheana Yue forecasts a slight uptick in global growth from 2.7% this year to 2.8% next year, suggesting that the boost from goods exports to Singapore’s economy will be “limited”.
OCBC’s Ling notes that 2025 NODX growth forecast is 3% to 5% y-o-y given the likely low base in 2024 but also assuming heightened uncertainties given Trump’s tariffs, while 2025 GDP growth forecast remains at 2% to 3% y-o-y.
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Electronics NODX saw a marginal improvement, growing 2.6% y-o-y in October, driven by integrated circuits and diodes and transistors which saw 16.6% and 1.7% y-o-y growth, respectively.
This was somewhat offset by declines in personal computers of 2.1% y-o-y and consumer electronics which saw a 19.9% y-o-y decline. Telecommunications equipment exports saw a 62.5% y-o-y fall.
Oxford Economics’ Yue notes that electronics was the “main bright spot”, which represents approximately a third of total exports.
Similarly, UOB economist Jester Koh notes that “electronic NODX remained resilient but [the] cycle could peak in the months ahead.”
This positive prognosis is “regurgitated” by the US Semiconductor Industry Association (SIA), with the global semi-conductor market showing significant y-o-y growth in July, with month-to-month sales rising for the fourth consecutive month.
Non-electronics NODX saw a 6.7% y-o-y decline due to drags from specialised machinery, pharmaceuticals and petrochemicals.
OCBC’s economist Selena Ling notes that petrochemicals fell 7.4% y-o-y, which could be reflective of softening capital expenditure (capex) demands and a cautious business outlook into 2025 alongside expectations of a “more challenging global trade environment” post-US elections.
On a six-month moving average (6MMA) y-o-y basis, electronics NODX saw a slight pullback in October but “remained robust” with a 10.1% growth, UOB’s Koh notes.
According to UOB’s Koh, the electronic cycle in South Korea and Taiwan which serve as a bellwether for the region appears to have peaked in 3Q2024 and is seemingly “on the cusp of a downcycle” which may hint that Singapore’s electronic NODX growth could embark on a similar downtrend in the coming months.
On the other hand, Oxford Economics’ Yue suggests that shifts in electronic trade flows appear to be benefitting Singapore and 3Q GDP and industrial production data suggest there is still scope for further gains.
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Looking at key markets, on a 6MMA y-o-y basis, NODX to the US and EU27 grew 2.2% and declined 3.8%, respectively.
UOB’s Koh states that this is supported by the ongoing lowering of policy rates by the Feds and European Central Bank (ECB) which could “spur investment and consumption activity” in their respective economies.
Meanwhile, NODX to China slowed significantly in October, falling 4.8% on a 6MMA y-o-y basis, reflecting weak consumer sentiment despite early signs of improvement in private consumption as reflected by the rebound in China's October retail sales, following policy support, UOB’s Koh adds.
Looking ahead, UOB Koh’s expects non-oil re-exports and NODX could experience some near-term boost from the front-loading of exports to the US amidst uncertainty surrounding the extent and timing of Trump’s tariffs on US imports.
Oxford Economics’ Yue remains cautious on the export outlook given tailwinds driving global demand outside of electronics.
Yue acknowledges that Trump's election might provide an uplift to export demand driven by stronger US consumer demand and front-loading of export orders in politically sensitive segments such as electronics.
However, Yue notes that demand from other advanced economies will likely remain sluggish and the electronics cycle is set to “come off the boil soon”.
“Exports growth will probably be unremarkable in 2025,” Yue adds.
