Non-oil domestic exports continue to struggle amid weak external demand and semiconductor downturn.
Singapore’s non-oil domestic exports (NODX) contracted by 14.6% year-on-year in November, a significant drop that surpassed the expected 6.5% decline, according to Enterprise Singapore data released on December 16. This follows a 6.1% fall in October, marking the second consecutive month of declining exports.
Both electronic and non-electronic exports faced declines. On a seasonally adjusted monthly basis, NODX fell 9.2%, the fourth consecutive month of decline, the longest stretch since 2017-2018. In November, the total value of NODX was S$14.3 billion, lower than both the previous month and the year-ago period.
The electronics sector saw a sharp 20.2% decline in exports, led by significant drops in integrated circuits, disk media products, and parts for PCs. This continues to reflect a downturn in semiconductor demand. Non-electronic exports also suffered, with a 12.8% year-on-year drop, largely driven by falls in non-monetary gold, pharmaceuticals, and primary chemicals.
Weak external demand contributed to the drop, particularly from Singapore’s top markets. Exports to mainland China, Hong Kong, and Malaysia fell sharply, while exports to the European Union, Japan, and the United States showed slower growth.
In total, Singapore’s trade shrank by 2.2% year-on-year in November, marking the first year-on-year decline since February 2021. This was largely driven by falling exports, which decreased by 4.2%, while imports remained flat. Analysts predict a further slowdown in exports, with some forecasting a potential mild recession in major export markets and weaker demand in the first half of 2023. However, a “U-shaped recovery” is expected in the second half of 2023, driven by China’s reopening and a potential Federal Reserve rate cut.
The weak performance of exports signals a challenging economic environment, and analysts expect the fall in NODX to dampen GDP growth in 2023.
