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Singapore key exports growth eases to 3.1% in September on continued electronics slump
THE growth of Singapore’s key exports eased in September, dragged by a contraction in electronic shipments as well as declining deliveries to most of the Republic’s top 10 key markets, including China and Hong Kong, data from Enterprise Singapore (EnterpriseSG) showed on Monday.
Non-oil domestic exports (NODX) in September grew 3.1 per cent year on year, down from the 11.4 per cent expansion in the previous month, as shipments of non-electronic products expanded, while that for electronics shrank.
September’s performance was lower than what private-sector economists had expected – a growth of 6.9 per cent year on year, according to a Bloomberg poll.
On a seasonally adjusted month-on-month basis, NODX shrank 4 per cent in September, extending the previous month’s 3.9 per cent decline, as both electronics and non-electronics exports contracted.
This brings the total level of trade to S$116.5 billion in September, lower than the previous month’s S$118.3 billion.
Electronic exports fell by 10.6 per cent year on year in September, continuing the previous month’s 4.5 per cent contraction. Disk media products contributed the most to the decline at 42.7 per cent, followed by parts of personal computers at 22.3 per cent, according to EnterpriseSG.
Maybank economists Chua Hak Bin and Lee Ju Ye said this was in line with the sharp decline in Singapore’s Purchasing Managers’ Index for the electronics sector to 49.4 in September, the lowest level since July 2020.
“Global demand for chips and electronics is falling as rising inflation and interest rates weigh on consumer demand,” said the Maybank team. “Major chipmakers Samsung, AMD and TSMC have reported results that widely missed projections and warned of a prolonged downturn.”
EnterpriseSG however noted that the contraction of electronic exports is due to a high base from a year ago, with the value in September 2021 at S$3.9 billion against a 2021 monthly average of S$3.7 billion.
The shipment of non-electronic products grew 7.6 per cent year on year, slowing down from August’s 16.9 per cent growth. This was attributed to a 34.2 per cent growth in exports of measuring instruments, followed by 22.4 per cent for pharmaceuticals.
Key exports to Singapore’s top 10 markets as a whole shrank in September.
The largest decline was to China, with a 33.8 per cent year-on-year contraction, compared with August’s 18.2 per cent decline. This was due to the 99.2 per cent slump in non-monetary gold exports, followed by a 38.6 per cent contraction in integrated circuits.
This was followed by shipments to Hong Kong, which shrank 16.7 per cent year on year in September, easing from the previous month’s 31 per cent contraction. The export of disk media products tumbled by 72 per cent, while that of electrical circuit apparatus fell 62.8 per cent.
Exports to the United States and the euro zone, which in August saw strong double-digit growth, only expanded a modest amount last month.
Shipments to the EU grew just 3 per cent year on year in September, compared with 57.3 per cent in the previous month, while exports to US rose 8.6 per cent year on year, down from August’s 60 per cent.
The best performing market was Indonesia, which saw shipments inch down to 25.6 per cent year on year in September, compared with 26.3 per cent in the previous month.
Exports to Taiwan, which in August contracted 24.5 per cent, improved last month with a 10 per cent increase.
On the whole, total trade grew 20.7 per cent year on year in September, slowing down from the previous month’s 26 per cent expansion.
Owing to weaker demand from East Asia, most economists are expecting NODX to slow further in the fourth quarter, with Maybank believing it could turn negative.
“We expect NODX growth to turn negative in the coming months on the back of an electronics downturn and softer growth in non-electronics,” said Maybank economists. “A China reopening remains a wildcard, but if it materialises, will provide a boost to Singapore’s exports as China alone accounts for 17.6 per cent of total NODX in 2021.”
But OCBC chief economist Selena Ling noted that there has not been any indication from Chinese President Xi Jinping to suggest any immediate relaxation of China’s zero-Covid strategy or any imminent step-up in policy stimulus for the matter.
And with US-China relations remaining challenging, Ling said the soft patch in the East Asia market “could continue to be somewhat of a millstone around the neck in the near term for regional manufacturing momentum”.
The silver lining, she said, is that NODX to the US remains “healthy” and that regional markets such as Indonesia and Thailand are “still resilient”.
Source: https://www.businesstimes.com.sg/government-economy/singapore-key-exports-growth-eases-to-31-in-september-on-continued-electronics