Singapore’s non-oil domestic exports (NODX) continued its growth trend for the thirteenth consecutive month in December, thanks to broad-based growth across the segments.
Official figures released by trade agency Enterprise Singapore (ESG) on Jan 17 indicated an 18.4% y-o-y expansion in NODX for the last month of 2021. This is a slight easing from the 24.2% y-o-y growth rate seen in the month before.
Even so, December’s showing is stronger than the 12.9% growth rate penciled by private-sector economists in a Bloomberg poll.
Terence Lee, an economist at CGS-CIMB says the relatively lower y-o-y growth in December’s NODX is “nothing to worry about” since the metric was grew by the faster rate in November since May 2017.
Meanwhile, UOB economist Barnabas Gan observes that Singapore’s export and manufacturing sectors remained largely buoyant in 2021 despite the risks and restrictions brought on by the pandemic.
“This is mainly due to the resilient export demand for Singapore’s electronic and non-electronic products, as seen from the strong performance for the whole of last year," he explains.
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Gan adds that Singapore's high vaccination rate makes it well-positioned to ride the endemic-Covid-19 recovery into 2022.
Dec’s NODX was led by a 13.6% expansion in electronic products such as integrated circuits, personal computers and disk media products.
The non-electronic export segment similarly grew by 19.9% thanks to higher shipments of pharmaceuticals, specialized machinery and petrochemicals.
Lee expects the export of specialised machinery to remain robust in 2022 as “global chip manufacturers scramble to shore up supply by investing heavily in production facilities”.
He quips that petrochemical exports will continue to recover from the global downcycle amid a return in demand.
On a seasonally adjusted m-o-m basis, NODX edged up by 3.7% in December, faster than the 1% seen in the month before.
This translates to $17.1 billion in takings for December’s NODX, compared to $16.5 billion in November.
In this time, Singapore’s NODX to its top 10 markets grew “as a whole” in December, with exports to Indonesia (+66.1%), China (+36.3%) and the EU27 (+32.5%) being the largest contributors.
With this, total trade for December was up by 31.4%, extending the 31.3% rise in the month before.
Total exports were up by 28% while total imports expanded by 35.4%.
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Looking ahead, CGS-CIMB’s Lee says that the escalation of tensions between the US and China could pose major downside risks to Singapore’s NODX this year.
Agreeing, Jung Sung Eun, senior economist at Oxford Economics says that export momentum could lose some steam amidst external headwinds.
"With foreign demand growth slowing, we forecast imports will outpace exports in 2022, which will result in net trade dragging on GDP (growth. But we think domestic demand will continue to recover, helping to support GDP growth of 3.6 per cent this year," he stresses.
Cover image: Bloomberg
