ANN/THE STRAITS TIMES – Key exports in Singapore returned to growth for the first time in over a year, while electronics remained in the red and the recovery was fragile.
Data from Enterprise Singapore (EnterpriseSG) showed yesterday non-oil domestic exports (Nodx) in November rose one per cent from a low base a year ago, snapping 13 straight months of decline. The turnaround was after a revised 3.5 per cent fall in October.
The November reading was slightly short of Bloomberg’s consensus forecast for 1.5 per cent growth.
Economists said while the upturn in November’s Nodx numbers was encouraging, any further recovery will be tentative and gradual as elevated interest rates continue to weigh on major global economies and China remains in the doldrums.
The weak performance of electronic exports remains a concern as well. In November, electronic Nodx continued to shrink as non-electronic shipments drove the rebound in Nodx.
Non-electronic exports grew 5.2 per cent in November from a year ago, reversing the 2.9 per cent decline in October.
Volatile pharmaceuticals and non-monetary gold contributed the most to the rise in non-electronic Nodx. Non-monetary gold refers to gold not held as reserve assets by the world’s central banks.
Both grew from a low base a year ago, with pharmaceuticals surging 118.9 per cent, while non-monetary gold rose 106.5 per cent. Conversely, electronic exports shrank for the 16th straight month, falling 12.7 per cent year on year in November. The drop was worse than in October, when electronic shipments contracted 5.6 per cent.
Integrated circuits (ICs) or semiconductors, which formed about half of electronic Nodx, and personal computers (PCs) drove the falls in electronic shipments.
ICs contracted by 18 per cent in November from a year ago, but at a three-month moving average – to smooth out any volatility in the monthly data – the pace of decline in ICs was slower compared with October and September.
Meanwhile, personal computers which made up nearly 10 per cent of Nodx, slipped 47.8 per cent from a high base a year ago.
Lead Asia economist at Oxford Economics Alex Holmes said the global semiconductor cycle has already bottomed out and turned upwards. However, any recovery in demand for electronic products will be “slow and bumpy”.
“Producers of electronic products still have big inventories, curtailing investment. Exports of specialised machinery – which include semiconductor manufacturing equipment – (also) remain weak”.
DBS economist Chua Han Teng said there is an improving trend in electronic Nodx on a three-month moving average basis, where the decline narrowed to 10 per cent in November from a year ago.
That is the best performance in nearly a year for electronic shipments, he added.
OCBC chief economist Selena Ling said a recovery in personal computer and 5G smartphone demand will be key for the electronic industry to bounce back after an extended downcycle.
