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Analysts expect full-year NODX to contract beyond the official -10% threshold after August’s 20.1% decline

OCBC is expecting Singapore's 2023 NODX to contact by "at least" 11% while UOB has lowered its estimates to -15%.

Analysts are expecting Singapore’s non-oil domestic exports (NODX) for the full year to contract beyond the government’s forecast range of -10.0% to -9.0% after August’s NODX numbers disappointed market expectations.

NODX for August declined by 20.1% y-o-y, lower than the Bloomberg median estimate of -17.1%, as both electronics and non-electronics NODX declined.

On a m-o-m basis, NODX fell by 3.8% to $13.5 billion.

NODX to the top markets also declined on the whole although NODX to Indonesia rose.


The biggest contributors to the decline in NODX were the US (-32.4%), the EU 27 (-28.9%) and China (-16.4%).

OCBC’s chief economist and head of global markets research and strategy, Selena Ling, is expecting the country’s full-year NODX to contract by “at least” 11% y-o-y following its performance in the first eight months of the year.

If this materialises, this would potentially mark the worst annual NODX performance since 2001 (-14.5% y-o-y). While there was a recent stabilisation in the July industrial production data at -0.9% y-o-y (4.1% m-o-m seasonally adjusted), the divergence with NODX suggests it bears watching if the manufacturing output improvement can be sustained, especially with the hopes for a turnaround in the global electronics industry towards the end of this year or early 2024,” Ling writes.

Our baseline remains no technical recession for the Singapore economy in 2H2023, but the persistent soft patch in external demand conditions imply some downside risk to 3Q2023 NODX forecast of -16.3% y-o-y and in turn the manufacturing performance in 3Q,” she adds.

UOB’s senior economist Alvin Liew has lowered his full-year forecast as he now sees Singapore’s NODX for 2023 contracting by 15% from 10% previously.

“Overall, Singapore’s export outlook remains troubled, and we continue to expect more y-o-y NODX contractions for a few more months before improving in the later part of 2H2023. To date, NODX in the first eight months of 2023, has contracted by 16.2% y-o-y,” he notes.

“Unless there is a sharp trade recovery in late 2023, the current NODX contraction trajectory will easily tip the full year 2023 decline well beyond the official -10% threshold,” he adds.

No sign of imminent electronics turnaround yet

Electronics exports, which fell by 21.1% y-o-y in August, was due to integrated circuits (ICs), disk media products and personal computers (PCs) contributing the most to the decline in electronic NODX. These products contracted by 28.5%, 30.6% and 25.6% respectively during the month.

On a y-o-y basis, non-electronic NODX contracted by 19.9% in August, as structures of ships & boats (-97.7%), pharmaceuticals (-37.7%) and specialised machinery (-25.5%) contributed the most to the decline.

In her report, OCBC’s Ling says that she sees “no sign of an imminent electronics turnaround yet”. However, any further delay in the electronics global cycle turnaround is likely to impact any downside growth risks for 1H2024. “Coupled with the currently weak growth footing of the Chinese economy, [the situation] could warrant a stronger fiscal stance at the Budget 2024,” she says, noting that the current figures are unlikely to include the monetary policy decision at the Monetary Authority of Singapore (MAS) yet. The meeting will be coming up in early October. “We anticipate no change in policy settings given still elevated core inflationary pressure.”


“Our earlier guarded enthusiasm due to the surprise back-to-back rebound in semiconductors output in June and July is now curbed by the latest August trade report which still reflects the persistent downturn in NODX, and together with the broad-based weakness in both electronics and non-electronics performance, continued to weigh negatively on manufacturing demand for Singapore,” says Liew.

“The resumption of NODX decline to US and the continued weakness of NODX numbers to EU 27 and major North Asian export destinations, especially China, weighs negatively on the trade outlook and we therefore maintain our call to expect sustained weakness in global demand amidst an on-going electronics downcycle (which we think has yet to find a bottom),” he adds.

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