Exports expand for eighth straight month in July by 12.7%

Exports grew by 12.7% year-on-year (YoY) in July, slightly lower than the 15.9% the month previous, based on the latest Exports Singapore data.

Both non-electronics and electronics exports grew by 12.1% and 15.0%, respectively.

Electronics export growth was driven by the 83.2% expansion in the PCs sector, followed by the 11.1% growth in Ics and 29.7% growth in diodes and transistors.

Meanwhile, specialised machinery, pharmaceuticals, and petrochemicals contributed the most growth to non-electronic exports, at 56.8%, 48.3% and 49.4%, respectively.

China continued to be the top destination for exports, expanding by 58.5% with a growth in demand for specialised machinery, non-monetary gold, and petrochemicals. This was followed by the EU 27 and Taiwan.

Exports to the EU 27 grew by 61.5% due to an increase in demand for civil engineering equipment parts, specialised machinery and pharmaceuticals, whilst exports to Taiwan grew by 37% due to increased demand in specialised machinery, ICs, and measuring instruments.

Total trade, YoY, grew by 19%, extending the 25% expansion the month previous. Total exports rose by 16.4% whilst total imports grew by 22%.

ADDX Senior Vice President for Capital Markets Samuel Gan said Singapore has benefitted from the global demand for semiconductors, but is at risk of getting hit by the worldwide chip shortage.

“Singapore has been a beneficiary of the global semiconductor upswing, but the worldwide chip shortage likely hindered the pace of expansion in electronic exports in July, even as global demand has remained strong. The shortage poses a risk to Singapore’s export performance in the months ahead, with chip scarcity expected to persist into 2022. Pressure on global supply chains, including challenges in global shipping, as well as the spread of the COVID-19 Delta variant could also negatively impact export performance in the second half of the year,” Samuel Gan said.

Meanwhile, UOB Global Economics and Markets Research Economist Barnabas Gan said Singapore’s external-facing industries will benefit from the recovery in global trade.

“We believe that Singapore’s external-facing industries will benefit from the continued recovery of the global trade wind, while higher commodity prices may provide the fillip to overall export value ahead. A relatively stronger export demand from Singapore’s key trading partners also suggests that demand in the region had remained buoyant while mindful of the ongoing COVID-19 risks,” Barnabas Gan said.

“As such, we continue to maintain our full-year NODX growth outlook at 8% for 2021, which is at the top-end of Enterprise Singapore’s full-year NODX growth upgrade to a range of between 7% and 8%, from a previous range of between 1% and 3%,” the UOB economist added.

OCBC Treasury Research head of research and strategy Selena Ling said they might upgrade their exports forecast for the year as the expansion streak continues.

“There is upside risk to our full-year 2021 NODX growth forecast of 8% YoY given the continued strong streak of NODX growth into July which could sustain for the remainder of the year, especially given the still low base around October-November 2020,” Ling said.