Singapore’s exports expands 8.8% in May

This is the 6th consecutive month of exports growth.

Singapore’s non-oil domestic exports (NODX) grew 8.8% in May 2021, driven by non-electronics exports. This also followed the 6% rise recorded in the previous month.

NODX y-o-y growth

Non-electronic products grew by 8.1% in May, following a rise of 4.7% in the previous month. In particular, specialised machinery (+58%), petrochemicals (+55.7%) and primary chemicals (+96.8%) accounted for the growth in the non-electronic segment.

Meanwhile, electronic products also saw an increase of 11% in May, compared to 10.9% in April. This was driven by ICs, diodes and transistors, and telecommunications equipment, which grew 5.8%, 53.9% and 52.3%, respectively.

The UOB Global Economics & Markets Research noted this is the 6th consecutive month that Singapore’s NODX expanded, which reflects the continued recovery in global trade demand.

“NODX enjoyed a low base in May 2020, where it fell 4.7% y/y then,” UOB economist Barnabas Gan said in a report.

“Nonetheless, Singapore’s external-facing industries are expected to benefit from the continued recovery of the global trade wind, especially from the robust demand for semiconductor equipment seen to-date.”

UOB added that it maintains its full-year outlook for NODX growth at 5% in 2021, taking into account that Singapore’s recovery is still hinged at the COVID-19 situation amongst others.

“Singapore’s economic outlook will depend on the COVID-19 situation, and any exacerbation seen from the recent discovery of new clusters this week could inject risks to Singapore’s overall growth prognosis,” UOB said.

In a separate report, the OCBC Treasury Research noted that the May results is below the market consensus forecast and their expectations of 16% YoY and 16.8% YoY, respectively.

OCBC linked this to the resurgence of the COVID-19 outbreak that placed Singapore under Phase 2 (Heightened Alert).

“Given that the Phase 2 (Heightened Alert) started in mid-May and coincided with the resurgence of Covid cases globally… this could have dampened near-term external demand conditions, notwithstanding the very low base last year,” said Selena Ling, Head for Treasury, Research & Strategy of Global Treasury for OCBC Bank.

OCBC added that there is a risk that the momentum of NODX’s growth will moderate in the near term, which could affect their growth forecast of 4% in 2021.

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