Singapore’s Non-oil domestic exports (NODX) saw a double-digit plunge in March from the high year-ago base, with the decline largely fueled by non-electronics, including volatile pharmaceuticals. In contrast, Maybank IB noted its non-oil re-exports (NORX), a proxy for wholesale trade, saw stronger growth than the preceding month.
NODX declined by -20.7% in March from a year ago (vs. -0.2% in Feb), its weakest performance in 7 months. Enterprise SG noted that March 2023 levels (S$17.6bn) had been the highest in 2023. In seasonally-adjusted month-on-month terms, NODX fell -8.4% (vs. -4.9% in Feb). The export slump was mostly volume-driven, with real NODX contracting by -18.1% YoY (vs. +1.5% in Feb). NORX growth accelerated to +4.9% (vs. +0.7% in Feb), as electronics picked up (+18.4% vs. +6.5% in Feb) while non-electronics declined (-7.4%). In volume terms, NORX was +9.2% higher than a year ago
(vs. +4.8% in Feb), hitting its highest level since Sep 2022.
The strong electronics NORX data (+18.4%) – despite weak electronics NODX (-9.4%) – suggests that global electronics demand and exports is strengthening, but Singapore’s electronics sector is lagging behind the rest of the region. For example, electronics exports rose in March for Korea (+37.5%) and Vietnam (+20.9%) while Taiwan’s headline exports rose +18.9%, in contrast to Singapore (-9.4%). Maybank IB said the weakness is temporary and electronics exports will recover more visibly in the second quarter, alongside the rest of the region, given encouraging PMI headline and PMI export orders
readings.
Decline Largely Fueled by Non-Electronics, Including Volatile Pharmaceuticals
In contrast, NODX to China, Hong Kong and Taiwan grew. Exports to China improved from the preceding month, underpinned by machinery & equipment and chemicals. Exports to Hong Kong were driven by electronics, while non-electronics fell.
Maintain NODX and GDP Forecasts
The house maintains its view for NODX to recover and grow between +7% and +9% in 2024 (vs. -13.1% in 2023). The export contraction in March is consistent with the slower than expected MTI flash estimates of 1Q GDP, which implied that manufacturing output fell -1.6% in Mar. NODX declined by a larger -3.4% in 1Q, compared to -1.4% in 4Q 2023. The Red Sea tensions may have been a speedbump to the manufacturing and export recovery.
Nonetheless, Singapore’s headline (50.7) and electronics PMIs (50.8) rose in March, consistent with an improvement in region-wide gauges. New export orders saw a faster expansion, across electronics (50.8) as well as overall manufacturing (51.4). These indicators suggest that the export recovery remains intact. NODX will likely improve in the coming months, as base effects turn more favorable and the electronics cycle upturn continues.
Maybank said it maintains its 2024 GDP growth forecast at +2.4%, which stands at the upper end of MTI’s
