Growth driven by non-electronics sectors despite ongoing challenges in global demand
SINGAPORE: Singapore’s non-oil domestic exports (NODX) rose by 1% in November, marking the first positive growth in over a year, according to The Edge Singapore. While this is a welcome development, the figures paint a mixed picture of Singapore’s trade landscape, with varied performances across major export markets.
In November, NODX to key markets presented a divided outcome. Exports to Taiwan, the European Union, and Indonesia showed declines, while shipments to the US, China, Thailand, and Hong Kong saw growth. However, these gains fell short of the levels reached before the economic downturn in 2022-2023.
The Ministry of Trade and Industry (MTI) had previously forecasted challenges in Singapore’s manufacturing and trade-related sectors through the end of 2023, primarily due to subdued external demand. Although the global electronics market continues to face sluggish demand, the MTI highlighted some tentative signs that the downturn could be nearing its bottom.
A closer look at the figures for November reveals a nuanced export landscape. Month-on-month, NODX increased by 0.3%, defying earlier expectations of a slight decline of 0.1%. On a year-on-year basis, growth remained modest at 1%, falling slightly short of the anticipated 1.5% expansion. Electronics exports took a significant hit, dropping by 12.7% compared to the same period in 2022.
The increase in the headline NODX figure was largely driven by non-electronics products, notably chemicals and pharmaceuticals, which recorded strong growth. This suggests that while some sectors continue to face challenges, others are contributing positively to the overall export performance.
The data released on December 18 came in just under the 1.5% growth forecast in a Bloomberg survey. Analysts point to a low base comparison with the previous year as a key factor behind the modest growth, as noted by Enterprise Singapore.
Although the growth in exports is a positive sign, it does not necessarily point to a strong rebound in global demand. Total trade in November saw an uptick, supported by export growth, though imports experienced a decline.
Looking ahead, the MTI maintains a cautious outlook for Singapore’s economy, which is expected to grow by around 1% in 2023. For the coming year, the growth forecast remains modest, with expectations of a 1%-3% expansion, as the global economic environment continues to present challenges.
