SINGAPORE: Singapore non-oil domestic exports (NODX) rose 12.7 per cent in July, marking the eighth month of expansion, Enterprise Singapore (ESG) data showed on Tuesday.
This was down from June’s 15.9 per cent pace, but slightly better than economists’ estimates of 12 per cent in a Bloomberg poll. Barclays economist Brian Tan noted that the moderation was due in part to a small unfavourable base effect, report agencies.
Despite the sequential decline, economists still saw July’s performance as holding up well, with Maybank Kim Eng analysts Chua Hak Bin and Lee Ju Ye characterising NODX as having “remained resilient in July, despite supply chain disruptions due to regional lockdowns and China’s slowing growth”.
Nor can the double-digit growth be attributed to base effects amid the pandemic. UOB economist Barnabas Gan noted that July’s growth figure comes “against a relatively strong performance over the same period in 2020, underlining the continued recovery of global trade flows”.
Year on year, July’s NODX growth was mainly due to non-electronics exports, though electronics exports rose too.
Non-electronics NODX grew 12.1 per cent, slowing slightly from 13.2 per cent in June. Contributing the most to this were specialised machinery, pharmaceuticals, and petrochemicals, with growth rates of 56.8 per cent, 48.3 per cent, and 49.4 per cent respectively.
Mr Tan highlighted that the sequential expansion in NODX “continued to be largely due to stronger shipments of specialised machinery for the manufacture of electronics and semiconductors, especially to China and Taiwan – likely reflecting manufacturers’ efforts to alleviate shortages in the semiconductor space”.
Last week, ESG upgraded its projections for full-year NODX growth to a range of 7 to 8 per cent, up from its earlier 1 to 3 per cent forecast. NODX grew 10.1 per cent in the second quarter, accelerating from 9.7 per cent in the first quarter.
NODX to Singapore’s top 10 markets rose as a whole in July, though NODX to the United States declined. The largest contributors to the rise in NODX were China, with a 58.5 per cent rise; the European Union, up 61.5 per cent; and Taiwan, up 37 per cent.
NODX to emerging markets rose by 59.9 per cent in July 2021, following the 68.2 per cent expansion in June, due mainly to South Asia (+94.6 per cent), CLMV or Cambodia, Laos, Myanmar and Vietnam (+71.4 per cent) and Latin America (+92.2 per cent).
Total trade was up 19 per cent year on year, extending the 25 per cent growth in June, with exports up 16.4 per cent and imports up 22 per cent.
But on a seasonally-adjusted monthly basis, total trade declined 1.2 per cent in July, deepening from June’s 0.4 per cent decrease. On a seasonally-adjusted basis, the level of total trade was S$93.6 billion, down from S$94.7 billion in June.
The Maybank economists maintained their full-year NODX forecast at 9 per cent, expecting exports in the second half of the year to be supported by resilient demand for semiconductor chips and related equipment, while non-electronics exports such as petrochemicals will continue to rise from the low base in 2020.
But they also noted downside risks with the Covid-19 Delta variant forcing lockdowns in parts of Asia, floods in China and Germany, and partial shutdowns in factories across Asean. “Freight capacity remains tight in the world’s major ports and container rates continue to climb to record highs,” they added.
For the broader region, the underlying momentum in regional goods exports slowed over the course of the second quarter, said JP Morgan analyst Ong Sin Beng, adding that July’s “new export orders” component of Purchasing Managers’ Index readings “has yet to signal a resumption of the prior strength”. “The Taiwan July export orders data, a useful bellwether of global demand, will thus be especially useful in determining the goods trajectory in H2 2021,” he added.