After experiencing a contraction in January due to the Chinese New Year (CNY) holiday, Singapore’s key exports demonstrated a significant rebound in February. The non-oil domestic exports (Nodx) rose by 7.6% year-on-year in February, reversing the previous month’s 2.1% decline, as reported by Enterprise Singapore. This increase, though substantial, fell just short of the 8.3% forecast by economists in a Reuters poll. The agency noted a combined Nodx growth of 2.3% over January and February to account for the varying impact of CNY.
Recovery Driven by Electronics and Non-Electronics Exports
Electronics Exports
On a monthly basis, the seasonally adjusted Nodx increased by 4.5% in February after a 3.3% decline in January. A significant contributor to this resurgence was the electronics sector, which rose by 6.9% year-on-year in February, following a notable 9.5% growth in January. This growth was predominantly driven by disc media products, integrated circuits, and personal computers. According to Chua Han Teng, DBS Bank’s senior economist, global trade uncertainties may eventually impact trade-dependent economies like Singapore. However, near-term demand for manufactured goods, including electronics, is expected to remain strong, supported by a global tech upcycle and expansion in new export orders as indicated by the purchasing managers’ index (PMI) for February.
Continuing on the electronics front, the increase reflects robust production capabilities and sustained global demand for high-tech goods. With a burgeoning tech industry and emerging markets necessitating advanced technologies, Singapore’s electronics exports appear well-positioned for continued growth. The emphasis on future-oriented products like integrated circuits demonstrates the country’s commitment to maintaining relevance in a rapidly evolving global market. The positive movement in electronics signifies that foundational sectors remain resilient even amid broader economic uncertainties. Furthermore, this growth underscores the nation’s ability to adapt to shifting global economic conditions, making strategic adjustments and capitalizing on technological advancements to boost export performance.
Non-Electronics Exports
In parallel, non-electronics Nodx exhibited significant improvement, increasing by 7.8% year-on-year in February after a 4.8% decline in January. This growth was chiefly attributed to a remarkable 106.9% surge in non-monetary gold, driven by safe-haven demand amid economic uncertainty, alongside a 23.1% rise in measuring instruments and a 37.5% increase in other specialty chemicals. The substantial uptick in non-monetary gold suggests investors’ heightened sensitivity to market volatility, seeking security through more stable assets.
Beyond precious metals, the performance of other non-electronics sectors also highlights the diverse nature of Singapore’s export portfolio. For instance, the significant rise in measuring instruments showcases the nation’s strong infrastructure in manufacturing precision tools and technologies highly demanded in various industrial applications. The increase in specialty chemicals further exemplifies Singapore’s capacity to diversify its export offerings, tapping into multiple industries globally and mitigating risks associated with over-reliance on any single sector. Together, these advancements in non-electronics exports reflect a broad-based recovery contributing to the overall positive Nodx performance in February.
Market Destinations and Future Outlook
Growth in Key Markets
Regarding market destinations, Nodx rose to significant economies such as the United States, Taiwan, and the European Union, though it saw declines in China, Hong Kong, and Indonesia. Notably, exports to the US increased by 21.5% year-on-year in February, bolstered by non-monetary gold, food preparations, and medical apparatus. Economic adviser Song Seng Wun of CGS International anticipates that front-loading of orders might sustain export growth to the US in early 2025. Yet, uncertainties surround the US trade policies, which could trigger a recession, potentially affecting Singapore’s export growth in the latter half of 2025 and into 2026.
Shipments to Taiwan surged by 77.9% in February, driven by specialized machinery, measuring instruments, and specialty chemicals. This significant rise underscores the deepening economic ties between Singapore and Taiwan, reflecting a mutual reliance on technology and precision engineering sectors. Similarly, Nodx to the EU grew by 16.7% in February, recovering from a 7.3% contraction in January, attributed to the strong performance of pharmaceuticals, measuring instruments, and cocoa. These gains illustrate the diverse nature of Singapore’s export markets and its ability to adapt to varying regional demands.
Anticipated Challenges and Economic Predictions
Following a contraction in January attributed to the Chinese New Year (CNY) holiday, Singapore’s key exports showed a notable recovery in February. The non-oil domestic exports (Nodx) increased by 7.6% year-on-year in February, bouncing back from the 2.1% decline recorded the previous month, according to Enterprise Singapore. Although this growth was significant, it slightly missed the 8.3% increase predicted by economists in a Reuters poll.
Enterprise Singapore highlighted that the Nodx growth over January and February combined was 2.3%, to accommodate for the varying impact of the CNY holiday. This adjustment provides a more accurate picture of the export trends, smoothing out the volatility caused by seasonal factors. Overall, the strong Nodx performance in February reflects the resilience of Singapore’s export sector, suggesting a positive outlook for the coming months, despite the initial setback in January.
