Exporters had another good month in September but the slower pace has prompted analysts to warn that the road to recovery remains bumpy.
Non-oil domestic exports (Nodx) rose 5.9 per cent over the same month last year, but that was markedly down on August’s 7.7 per cent expansion and missed the 11.5 per cent rise forecast by economists in a Bloomberg poll.
Nodx has now risen in seven out of nine months of this year compared with only one month of gain last year.
Economist Sung Eun Jung from Oxford Economics said: “While Singapore’s trade has turned the corner after contracting in May, its recovery path remains uncertain as countries still grapple with localised outbreaks. Accordingly, we expect the recovery in trade to ease in the fourth quarter.”
The Government predicted in August that Nodx would grow by 3 per cent to 5 per cent this year over last year, reversing an earlier view of a 1 per cent to 4 per cent fall.
Nodx last month shrank 11.3 per cent on a seasonally adjusted basis from the previous month after a 10.5 per cent expansion from July to August. The main culprit was a decline in non-electronics exports that outweighed the growth in electronics shipments.
Last month’s Nodx was mainly driven by electronic goods from a low base last year, Enterprise Singapore data noted yesterday, with shipments up 21.4 per cent year on year after a 5.7 per cent increase in August. Exports of integrated circuits shot up 30.1 per cent, disk media products grew 15.2 per cent while PC parts expanded 22.7 per cent.
Maybank Kim Eng economists Chua Hak Bin and Lee Ju Ye noted that global demand for semiconductors remains firm as more people are buying work-from-home gadgets and industries are going digital amid the pandemic.
Barclays Bank economist Brian Tan said last month’s slower rate of growth was mainly due to a sharp pullback in non-electronics exports, especially non-monetary gold, which offset the boost from a favourable base effect in electronics shipments.
Non-electronics Nodx rose 1.8 per cent last month after 8.3 per cent growth in August. The biggest contributors were non-monetary gold, up 53.4 per cent, specialised machinery, ahead 34.2 per cent, and food preparation shipments, which rose 30.7 per cent.
Ms Selena Ling, OCBC Bank’s head of treasury research and strategy, noted the unexpected drag from pharmaceutical exports, which plunged 27.3 per cent year on year.
“(This) could be due to the high base last year. Nevertheless, the volatile nature of the Covid-19 pandemic and vacillating global vaccine prospects could also mean that one cannot rely on pharmaceuticals exports to drive Nodx growth,” she said.
Ms Ling said that Nodx growth in the fourth quarter could ease to around 2.2 per cent year on year. “I expect fourth-quarter Nodx growth may run into a more bumpy road, given the latest Covid-19 uptick in Europe and the conditional movement control order in Malaysia.”
Shipments reached $13.8 billion last month, down from $15.6 billion in August, on a seasonally adjusted basis.
Exports to Singapore’s top markets as a whole grew last month but declined for Indonesia, Hong Kong, Thailand and South Korea.
Shipments to the European Union’s 27 member states surged 60.5 per cent and rose 28.8 per cent to Malaysia but advanced just 3.7 per cent to the United States.