Analysts have mixed sentiments on non-oil domestic exports (NODX) estimates for 2024 after Enterprise Singapore released August’s figures on Sept 17.
During the month, NODX grew by 10.7% y-o-y, carrying on from the 15.7% expansion in July. On a m-o-m seasonally adjusted basis, NODX contracted by 4.7%, following a 12.2% expansion in the previous month.
Electronic NODX expanded by 35.1% on a y-o-y basis. Integrated circuits (IC), disk media products and personal computers (PCs) expanded by 52%, 166.8% and 36% respectively, contributing the most to the growth in electronic NODX.
According to DBS’s Chua Han Teng, the growth in electronic NODX can be attributed to the ongoing recovery in electronic shipments. The global demand for Singapore’s electronic products have remained resilient, evidenced by the “sustained expansion in electronic new export orders for the ninth successive month”, he notes.
Non-electronic NODX increased by 3.7% on a y-o-y basis, easing from the 15.5% growth in July. This can be attributed to a fall in pharmaceutical exports which contracted 31.6% y-o-y. Furthermore, petrochemical exports increased a mere 0.9% y-o-y, compared to the 28% growth in July.
RHB Bank Singapore analyst Barnabas Gan is keeping his NODX full-year growth estimate at 1.5%. Gan is not “concerned about the sequential contraction” this month given strong electronic exports, likely recovery of pharmaceutical exports and global growth. RHB’s Gan believes that pharmaceutical exports are “well-positioned” to bounce back in “block blaster fashion” as the decline is temporal. Looking ahead, RHB’s Gan believes that despite the property-related risks in China, global growth will continue to support ASEAN’s export-oriented economic structure.
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On the other hand, UOB analyst Jester Koh increased his full-year NODX growth forecast to 3%, up from 2.5% previously. Koh noted the “strengthening recovery momentum in electronics”, which he attributes to the upgrading of consumer electronics for generative AI-related applications and the consistent replacement of equipment acquired during COVID. These are “positive tailwinds for the segment”, he says.
This sentiment is echoed by DBS’s Chua who expects Singapore firms to capitalise on the “global technology upcycle”.
Meanwhile, analysts from Oxford Economics, OCBC and DBS maintain a cautious outlook.
Oxford Economics’ Sheana Yue recognises that electronics continues to experience “robust growth” but maintains a “cautious outlook on exports given few tailwinds” outside of the electronics segment. While the electronic segment faces “favourable conditions” following the ongoing chip upcycle, “global growth will remain unremarkable” into 2025, she says.
OCBC’s Selena Ling notes that the “external landscape remains complicated” given the upcoming US presidential elections, ongoing soft patch in China and geopolitical tensions. However, “one silver lining is that the global monetary policy easing cycle has started”, Ling says.
DBS’s Chua Han Teng notes that while the balance of risks to Singapore’s exports outlook has improved, they “remain vigilant” given ongoing global uncertainties, particularly ongoing geopolitical tensions that could lead to supply chain disruptions and impact global trade activity.
