Singapore's Trade Dwindles as Main Exports Dive 20.2% in July
The fall of Singapore's leading exports sustained its 10-month decline in July, impacted by the shortcomings in both electronics and non-electronics sectors.
Non-oil domestic exports contract further
Based on data from Enterprise Singapore (EnterpriseSG), non-oil domestic exports (Nodx) in July declined by 20.2% compared to July 2022 and contracted 3.4% from the previous month. This plummet is notably worse than the proposed 14.4% shrinkage anticipated by economists in a Reuters poll. Furthermore, Nodx shrunk by 15.6% from the same period in the previous year in June, but saw a slight growth of 5.2% from May.
Trade constraints impacting Singapore
Experts like Mr. Louis Kuijs, chief Asia economist at S&P Global Ratings, attribute the recent downturn in Asia's trade, including Singapore, to weakened demand from trade giants like the United States and Europe, alongside unsatisfactory demand from China. Additionally, the delay in semiconductor industry recovery also contributes to the slump. Owing to the falling prices of tradable goods, export revenues in US dollar terms are also affected. The constraints causing the current situation are not expected to alleviate in the near future, creating a subdued outlook for Singapore’s trade.
Electronics and non-electronics exports facing downturn
The decline in electronics accounted most significantly to July's Nodx, dealing a 26.1% slump compared to July 2022. Despite improvements in telecoms equipment exports, it wasn't enough to counter the deep-seated slump in integrated circuits, disk media products, and parts of integrated circuits.
Non-electronics exports also reported a slump of 18.5%, hampered by non-monetary gold, specialized machinery, and petrochemicals, falling from a high base recorded in July 2022. Petrochemical exports fell by 23% year on year, due to refinery maintenance closures and weak demand.
Exports to major markets plummet
It was observed most of Singapore's top 10 markets reported a contraction in shipments in July, excluding the United States. For instance, exports to China plummeted 20.1% year on year in stark contrast to a 3.1% growth in June, as a result of weaker exports of integrated circuits, pharmaceuticals, and petrochemicals. As for the European Union, Nodx plummeted by 38.6%, mostly due to a decline in pharmaceuticals, primary chemicals, and specialized machinery exports. Even exports to Taiwan contracted by 36%, constrained by specialized machinery, integrated circuits, and parts of integrated circuits.
Singapore downgraded its economic growth forecast in the previous week amid a weak global economy and sluggish demand from trading partners. Also, its 2023 growth projections for exports were revised due to the continuous downturn in global electronics demand, which is impacting Singapore's trading partners. The current performance predicts a contraction of 9% to 10% in both Nodx and total merchandise trade in 2023, influenced by the down cycle in manufacturing and lower oil prices.