Singapore’s export growth continues 20-month streak of expansion in July but eases to 7%

SINGAPORE’S key exports in July grew for the 20th straight month, albeit at a slower pace compared to the previous month, data from Enterprise Singapore showed on Wednesday (Aug 17).

Non-oil domestic exports (NODX) rose 7 per cent year on year in July, easing from the previous month’s growth, which had been revised to 8.5 per cent. This came on the back of an increase in both electronic and non-electronic exports.

Still, the performance surprised private-sector economists who had predicted a 6.4 per cent growth, according to a Bloomberg poll.

The export of electronic products expanded 10.3 per cent, faster than the 4.1 per cent growth in June, with much of the growth coming from integrated circuits, parts of integrated circuits and disk drives.

The growth of non-electronic exports slowed to 6.1 per cent in July, from 10 per cent in the previous month. Specialised machinery, pharmaceuticals and structures of ships and boats contributed the most to this growth.

On a month-on-month seasonally adjusted basis, NODX inched up 1.4 per cent, slower than the 3.2 per cent expansion in June.

Overall, the value of NODX reached S$17.8 billion in July, just slightly higher than the S$17.6 billion recorded in the previous month and S$16.1 billion seen in July 2021.

Singapore’s key exports to its top 10 markets as a whole rose in July, although NODX to China, Japan, Hong Kong and Thailand declined.

The region that saw the largest export growth was the eurozone, which recorded an expansion of 22.9 per cent year on year, reversing the 16.4 per cent decline in June. Growth was led by pharmaceuticals at 87.3 per cent and integrated circuits at 52.5 per cent.

Exports to Malaysia rose 29.9 per cent year on year in July, but this was slower than the previous month’s 43 per cent growth. Non-monetary gold exports surged 109.3 per cent, followed by a 104.8 per cent jump in primary chemicals export.

This was followed by exports to Taiwan, which grew 24.4 per cent year on year in July, extending the 9.4 per cent increase in the previous month. The export of parts of integrated circuits swelled 161.4 per cent, while that for specialised machinery rose 66.1 per cent.

Meanwhile, exports to China shrank 21.3 per cent year on year in July, compared with the modest 2.1 per cent growth in the previous month.

NODX to Japan contracted sharply at 15.3 per cent year on year – the first this year – compared with a growth of 18.6 per cent in June.

Economists voiced concern about the weakening demand from East Asia, noting that it could portend a further slowdown in the coming months.

“Notably, weakness is emerging in semiconductor end markets, especially those exposed to consumer spending, and is attributable to rising inflation and interest rates pressuring consumer disposable income and in turn spending on electronics products like PCs and smartphones,” said OCBC chief economist Selena Ling.

She added however that demand remains resilient for continued cloud infrastructure investments for data centres, as well as the transition to electric and autonomous vehicles.

Alex Holmes, senior Asia economist at Oxford Economics, said Singapore’s other trade partners are likely to be struggling with high inflation and tightening financial conditions weighing on demand.

“While the outlook for domestic demand is still resilient as corroborated by the robust momentum in imports, its ability to offset the downside pressures from external challenges is limited,” he said.

Singapore’s total imports grew 33 per cent year on year in July, whereas total exports expanded 29.1 per cent year on year. This brings the Republic’s total trade growth to 31 per cent year on year, a notch higher than June’s 30.8 per cent expansion.