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Non-oil domestic exports fell for the eighth straight month, raising fears of a technical recession in the second quarter. PHOTO: ST FILE
Chor Khieng Yuit
Senior Correspondent
UPDATED
6 HOURS AGO
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SINGAPORE - The Republic’s exports have shown no signs of picking up yet, as non-oil domestic exports (Nodx) fell 14.7 per cent in May, from the same month a year ago, worsening from a 9.8 per cent contraction in April and an 8.2 per cent dip in March.
This represents the eighth straight month of contraction for exports since September 2022 when Nodx was up 3.1 per cent.
Similarly, the country’s manufacturing output contracted for an eighth straight month in May, according to figures out earlier this week. It was the first double-digit contraction since November 2019.
The sluggish export performance is raising fears Singapore will slip into a technical recession in the second quarter. The Singapore economy contracted in the first quarter, falling 0.4 per cent from the previous quarter.
The Straits Times examines why Nodx is an important indicator of the country’s economic growth.
The World Bank’s latest data shows exports of goods and services were around 185 per cent of Singapore’s gross domestic product (GDP) in 2021, up from 182 per cent in 2020.
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This contrasts with its Asean peers, whose economies are more dependent on domestic demand, with exports making up less than 70 per cent of GDP in 2021 – Malaysia (68.8 per cent), Thailand (58.2 per cent), the Philippines (25.7 per cent) and Indonesia (21.6 per cent).
OCBC Bank’s head of treasury research and strategy Selena Ling said Nodx shows Singapore’s exports to other countries and therefore takes the pulse of external demand and health of the global economy.
“It is a good proxy for generally how our manufacturing and our trade are doing,” she said.
If overseas demand is weak, it will hurt the manufacturing sector as the country cannot export all the products it makes.
Mr Ong Sin Beng, chief economist for Asean at JP Morgan, said Nodx is a “good barometer of where we are in the goods and industrial production cycle”.
Singapore exports electronics, which include semiconductors and integrated circuits, and non-electronic products like pharmaceuticals and petrochemicals.
Electronics shipments make up around 19 to 21 per cent of Nodx, with non-electronics accounting for the rest.
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Goods which have imported materials or parts are also considered in the Nodx figures if they have been manufactured, assembled or processed here.
Non-oil re-exports refer to all goods which are exported from Singapore in the same form as they have been imported without any transformation. There is no value-add by local manufacturers.
Repacking, splitting into lots, sorting and grading are not considered undergoing transformation.
ST Explains: What Singapore’s key export figures signal about its current economic outlook
Non-oil domestic exports fell for the eighth straight month, raising fears of a technical recession in the second quarter. PHOTO: ST FILE
Chor Khieng Yuit
Senior Correspondent
UPDATED
6 HOURS AGO
FacebookWhatsApp
SINGAPORE - The Republic’s exports have shown no signs of picking up yet, as non-oil domestic exports (Nodx) fell 14.7 per cent in May, from the same month a year ago, worsening from a 9.8 per cent contraction in April and an 8.2 per cent dip in March.
This represents the eighth straight month of contraction for exports since September 2022 when Nodx was up 3.1 per cent.
Similarly, the country’s manufacturing output contracted for an eighth straight month in May, according to figures out earlier this week. It was the first double-digit contraction since November 2019.
The sluggish export performance is raising fears Singapore will slip into a technical recession in the second quarter. The Singapore economy contracted in the first quarter, falling 0.4 per cent from the previous quarter.
The Straits Times examines why Nodx is an important indicator of the country’s economic growth.
1. Why should people care about the monthly Nodx numbers?
Singapore is an open economy and very reliant on external trade as one of its key growth drivers.The World Bank’s latest data shows exports of goods and services were around 185 per cent of Singapore’s gross domestic product (GDP) in 2021, up from 182 per cent in 2020.
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This contrasts with its Asean peers, whose economies are more dependent on domestic demand, with exports making up less than 70 per cent of GDP in 2021 – Malaysia (68.8 per cent), Thailand (58.2 per cent), the Philippines (25.7 per cent) and Indonesia (21.6 per cent).
OCBC Bank’s head of treasury research and strategy Selena Ling said Nodx shows Singapore’s exports to other countries and therefore takes the pulse of external demand and health of the global economy.
“It is a good proxy for generally how our manufacturing and our trade are doing,” she said.
2. How is Nodx an indicator of the performance of Singapore’s manufacturing sector?
Ms Ling said a lot of products produced in Singapore are not for domestic consumption but for the global markets, so “whatever we produce, we need to be able to sell”.If overseas demand is weak, it will hurt the manufacturing sector as the country cannot export all the products it makes.
Mr Ong Sin Beng, chief economist for Asean at JP Morgan, said Nodx is a “good barometer of where we are in the goods and industrial production cycle”.
Singapore exports electronics, which include semiconductors and integrated circuits, and non-electronic products like pharmaceuticals and petrochemicals.
Electronics shipments make up around 19 to 21 per cent of Nodx, with non-electronics accounting for the rest.
Singapore key exports tumble 14.7% in May, raising recession risk
S’pore’s GDP growth forecast for 2023 dips to 1.4%: MAS survey
3. What about non-oil re-exports? What is the difference between non-oil domestic exports (Nodx) and non-oil re-exports?
Enterprise Singapore (EnterpriseSG) said Nodx refers to exports of Singapore origin. These include commodities grown or produced here, and goods which have gone through some transformation – they are manufactured, assembled or processed here.Goods which have imported materials or parts are also considered in the Nodx figures if they have been manufactured, assembled or processed here.
Non-oil re-exports refer to all goods which are exported from Singapore in the same form as they have been imported without any transformation. There is no value-add by local manufacturers.
Repacking, splitting into lots, sorting and grading are not considered undergoing transformation.
