Singapore’s non-oil domestic exports (NODX) grew for the seventh straight month in October to beat forecasts, driven by a continued surge in pharmaceutical shipments.
Exports rose a surprise 8.3 per cent compared to the previous year, following an 8.1 per cent rise in September, data from trade agency Enterprise Singapore showed on Friday (Nov 16).
The result was well above the 1 per cent rise predicted in polls by Reuters and Bloomberg. On a seasonally adjusted month-on-month basis, exports rose 4.2 per cent in October, bouncing from the 4.4 per cent contraction seen in the previous month.
Shipments of non-electronic products grew 12.8 per cent year-on-year, boosted by pharmaceutical exports which chalked up an 89.7 per cent growth, extending a sharp 67.5 per cent jump in September.
Food preparations (104.9 per cent) and specialised machinery (11.7 per cent) also contributed to the growth in non-electronic exports.
Electronic exports remained in the doldrums, declining 3.5 per cent after a 1.3 per cent decrease in the previous month.
Overall, exports to the majority of Singapore’s top 10 markets rose in October, except China, Taiwan and Malaysia. The largest contributors to the NODX increase were the EU (37 per cent), the US (32.8 per cent) and Japan (20.7 per cent).
IG market strategist Pan Jingyi noted that the ongoing trade tensions may have contributed to the paring of growth for exports to China, but that the rest of the exports to top destinations have shown improvements, “giving us a positive early fourth-quarter signal”.
UOB senior economist Alvin Liew said that despite October’s “outperformance”, he remains “less sanguine” about NODX outlook.
“Exports of electronics NODX looks to remain weak because of the high base effects from 2017 and the decelerating global semiconductor sales,” said Mr Liew.
“We continue to be concerned about the ongoing US-China trade tensions, which will certainly cloud the outlook for a very trade-dependent Singapore. The more cautious trade outlook is reinforced by the significant NODX declines to China in recent months,” he added.
He pointed out that the latest trade numbers continue to show a shifting importance of export destinations away from China.
“Exports to China contracted for the sixth consecutive month and suffered a more significant decline of -25.8 per cent year-on-year from -17.8 per cent in September,” he said, adding that NODX to Taiwan and South Korea remained lacklustre.
“The NODX declines to China and parts of North Asia may be correlated with the global tech cycle slowdown and weaker Chinese demand while stronger exports to US reflect the robust economic outlook and final demand in US,” he added.