Singapore exports grow by 7.7% in March as gold shipments lift trade

KEY Singapore exports rose for the 16th straight month in March, helped by a surge in gold, according to data from trade agency Enterprise Singapore (ESG) on Monday (Apr 18).

Non-oil domestic exports (NODX) growth eased to 7.7 per cent year on year, from 9.4 per cent in the month before, but was still higher than the forecast of 1.6 per cent in a Bloomberg poll.

Shipments of products from Singapore’s linchpin electronics industry were up by 11.5 per cent, nearly flat on February’s 11.6 per cent expansion. Meanwhile, non-electronic NODX grew by 6.8 per cent in March, slowing from the 8.8 per cent in the month prior.

Still, ESG highlighted higher exports of non-monetary gold, which was higher by 86.5 per cent year on year; pharmaceuticals (17.9 per cent); and measuring instruments (19.5 per cent).

“Pharmaceuticals and non-monetary gold – which tend to be volatile – and still-rising electronics exports helped NODX to surprise on the upside in March, despite the war in Ukraine and lockdowns in China,” noted Barclays senior regional economist Brian Tan.

Selena Ling, chief economist at OCBC, added that the first-quarter NODX growth of 11.4 per cent – up from 9.6 per cent in the year-ago period – “suggests that NODX growth is off to a good start despite the twin headwinds of inflation … as well as the likely slowdown in China’s demand”.

Yet NODX fell in real terms by 3.4 per cent year on year, widening from 1.6 per cent previously, for its second straight month of decline. The contraction reflects manufacturing capacity limits and supply disruptions, and indicates that industrial production may retreat in March, said Maybank economists Lee Ju Ye and Chua Hak Bin.

Priyanka Kishore, head of India and South-east Asia economics at Oxford Economics, and senior economist Jung Sung-Eun, said in a joint note: “The sharp drop in momentum for real exports reflects weakening global trade and growth.

“Ongoing supply chain disruptions pose further challenges to trade, with China’s continued zero-Covid approach adding to logistical challenges. We expect export momentum to remain on a weak footing in the second quarter as well.”

Headline NODX to most of Singapore’s top 10 markets increased year on year in March, with Hong Kong, South Korea and Thailand the only exceptions.

NODX demand was led by the United States, which reversed an earlier decline to expand by 68.1 per cent on shipments of non-monetary gold, pharmaceuticals, and specialised machinery.

But NODX to emerging markets shrank by 28.9 per cent, against 29.6 per cent before – largely due to the Cambodia, Laos, Myanmar, and Vietnam region, the Caribbean, and Latin America.

Non-oil re-exports, a proxy for wholesale trade, increased by 11.4 per cent in March, down from 19.5 per cent in the month before.

Total trade rose by 17.6 per cent year on year, compared with 20.9 per cent in the month before, which ESG attributed to increases in both oil and electronics trade.

On a monthly, seasonally adjusted basis, NODX declined by 2.3 per cent in March to S$17.2 billion in March, a slight pick-up from the decrease of 2.9 per cent in February.