Singapore’s key exports have now grown for 16 months running, though the pace keeps cooling. Non-oil domestic exports (Nodx) rose 7.7 per cent year on year in March 2022, according to Enterprise Singapore (ESG), down from a revised 9.4 per cent in February and 17.6 per cent in January.
The result was still far better than analysts expected. A Bloomberg poll had averaged 1.7 per cent. The uncertainty from the war between Russia and Ukraine is one reason growth keeps slowing.
Electronics and non-electronics
Electronics Nodx grew 11.5 per cent, just under February’s 11.6 per cent, with integrated circuits, disk drives and personal computers doing the lifting. Non-electronics Nodx climbed 6.8 per cent after 8.8 per cent the month before. Non-monetary gold, pharmaceuticals and measuring instruments contributed most.
Month on month, with seasonal adjustment, Nodx dropped 2.3 per cent in March after a 2.9 per cent fall in February. Non-electronics exports caused the decline while electronics shipments grew. Nodx came to $17.2 billion, down from $17.6 billion in February.
Shipments to the top 10 markets as a whole rose. Exports to Hong Kong, South Korea and Thailand fell. ESG named the United States (68.1 per cent), Malaysia (29.1 per cent) and the European Union (16.8 per cent) as the biggest contributors to growth.
Prices versus volumes
Economists warned that the headline figure flatters. Maybank’s Chua Hak Bin and Lee Ju Ye said exports are being pushed up by higher prices, not larger volumes. Adjusted to 2018 prices, real Nodx shrank 3.4 per cent in March, its second straight monthly contraction, after a 1.6 per cent decline in February. They tied this to limits on manufacturing capacity and supply disruptions. “The negative real export growth suggests that industrial production may pull back sharply in March from the highs in February,” they said.
Oxford Economics analysts Priyanka Kishore and Sung-Eun Jung found real total exports down 1.1 per cent year on year in March, after a 7.9 per cent gain in February. Their view: “The sharp drop in momentum for real exports reflects weakening global trade and growth.” They expect export momentum to stay weak in the second quarter, with China’s zero-Covid-19 approach adding to logistical problems.
Outlook
OCBC chief economist Selena Ling said March brought first-quarter Nodx growth to 11.4 per cent year on year, up from 9.6 per cent a year earlier, even with the Omicron surge. She saw a good start despite two headwinds: inflation worsened by supply bottlenecks linked partly to the Ukraine war, and a probable slowdown in Chinese demand during Covid-19 lockdowns.
The lockdowns in China late in March could be felt more clearly from April, she said. She projected second-quarter Nodx growth easing to 7.9 per cent year on year, with electronics slowing. “A degree of caution may be warranted in the coming months,” Ling said, because the conflict could disrupt supply chains for energy, commodities and food, and keep inflation higher for longer.
