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Singapore exports up 12.3% in September to extend 10-month winning streak
SINGAPORE exports rose for the 10th straight month in September, beating private-sector analysts’ expectations to expand by 12.3 per cent year on year.
Non-oil domestic exports (NODX) growth picked up from the 2.7 per cent expansion in August and also came in ahead of the estimate of 8.7 per cent in a Bloomberg poll, data from government agency Enterprise Singapore (ESG) showed on Monday (Oct 18).
The trade sector was buoyed by segments such as petrochemicals, specialised machinery and pharmaceuticals, though linchpin electronics exports grew as well.
Electronics NODX rose by 14.4 per cent, against 16.7 per cent in August, with a boost from integrated circuits (ICs), personal computers, and telecom equipment. The growth was “driven primarily by ICs amid robust global semiconductor demand”, ESG said.
Meanwhile, non-electronics shipments expanded by 11.7 per cent, reversing a dip of 1.4 per cent in August.
The growth was led by petrochemicals and pharmaceuticals, which both rebounded from earlier low bases, as well as increased shipments of specialised machinery NODX, which ESG said was “in line with robust global semiconductor demand”.
But Brian Tan, economist at Barclays, added in a flash note: “Our estimates suggest the rise in non-electronics exports was largely due to a continued climb in shipments of non-monetary gold.”
On a seasonally adjusted, month-on-month basis, NODX was up by 1.2 per cent to S$15.7 billion in September, after the previous month’s 3.5 per cent decrease.
NODX rose year on year to 7 of the Republic’s top 10 markets, helped by more demand for products such as non-monetary gold, petrochemicals, and ICs in China, as well as demand for specialised machinery, ICs and telecom gear in South Korea.
That’s even with declines in shipments to the European Union, Thailand and Malaysia, which OCBC chief economist Selena Ling said suggested that “the energy crisis in Eurozone amid skyrocketing energy prices is starting to hurt demand, while NODX to the latter two economies may have been dented by the recent tightening of restriction measures due to the Delta variants”.
Meanwhile, NODX to emerging markets grew 41.4 per cent, mainly on demand from South Asia; the Cambodia, Myanmar, Laos, and Vietnam region; and the Middle East.
Non-oil re-exports, a proxy for the wholesale trade industry, expanded by 16.4 per cent year on year in September, compared with 19.0 per cent in August.
Overall, total trade rose by 18.7 per cent in September, after growing 19.8 per cent in August, on increases in both exports and imports.
“Total trade growth in September 2021 reflected the increase of both oil and electronics trade,” ESG reported, citing a year-ago low base in oil prices, and uplift from “strong global semiconductor demand” on exports in other markets.
Said Oxford Economics analysts Priyanka Kishore and Jung Sung-Eun in a flash note: “The near-term outlook for exports has turned more challenging due to persistent supply side disruptions and signs that global trade growth has peaked.
“Still, we expect strong electronics demand to keep trade and current account surplus elevated in the coming quarters, even if easing from a near-record level in the second quarter.”
Similarly, Lee Ju Ye and Chua Hak Bin at Maybank Kim Eng wrote that “exports will likely remain buoyant in the fourth quarter, supported by strong chip demand and the reopening of more countries in the region, including Malaysia, Indonesia and Thailand”.
ESG has officially forecast full-year NODX to expand by 7 per cent to 8 per cent in 2021. Maybank KE maintained a higher estimate of 9 per cent growth, while OCBC expects 10.5 per cent to 11 per cent, even taking into account supply-chain disruptions.
But export growth is likely to moderate in the year ahead, added Ling, while projecting that NODX growth will slow to 4 per cent to 5 per cent in 2022 “with a potential slow start in the first half of 2022 due to the supply chain disruptions before they abate”.
Source: https://www.businesstimes.com.sg/government-economy/singapore-exports-up-123-in-september-to-extend-10-month-winning-streak