Singapore’s NODX plunges 20.7% in March, signaling deep economic strains

In a disconcerting turn for the economy, Singapore’s Non-oil Domestic Exports (NODX) reported a sharp contraction in March 2024, signaling deeper issues in major sectors.

Official data released by Enterprise Singapore (ES) on Wednesday (17 Apr) reveal a year-on-year decrease of 20.7% in NODX, down from the slight 0.2% reduction in February. This significant contraction spanned both the electronics and non-electronics sectors.

The electronics sector witnessed a notable downturn, with electronic NODX dropping by 9.4% due to steep declines in specific categories.

Telecommunications equipment faced the most dramatic fall, plunging by 38.8%. Integrated circuits (ICs) and diodes & transistors also experienced declines of 8.0% and 11.0%, respectively.

However, the non-electronics sector reported even more drastic declines, contracting by 23.2%.

%.

Among the most affected commodities were pharmaceuticals, structures of ships and boats, and non-monetary gold. Pharmaceuticals experienced a catastrophic fall of 70.3%, highlighting challenges such as global supply chain disruptions or shifts in international demand.

Shipbuilding components, including structures of ships and boats, saw a near-total reduction with a 99.8% decline, reflecting severe downturns in global shipping and marine engineering markets.

Non-monetary gold, often used as a hedge against economic uncertainty, saw its trade reduced by half, declining 49.1%, indicating significant shifts in investment flows and investor confidence.

On a month-to-month seasonally adjusted basis, March continued the negative trend with an 8.4% decline, deepening from a 4.9% decrease in February, reducing the NODX level to S$13.0 billion, a sharp fall from the previous month’s S$14.2 billion and well below the S$15.7 billion recorded in March 2023.

Despite the overall downturn, some areas of trade demonstrated resilience. Non-oil Re-exports (NORX) rose by 4.9% year-on-year, primarily fueled by the electronics sector, where PCs skyrocketed by 556.2%.

Nevertheless, non-electronic NORX fell by 7.4%, impacted negatively by decreases in personal beauty products (24.3%), works of art (75.4%), and pharmaceuticals (17.3%).

Total trade figures for March indicated an economic slowdown, with a 1.8% year-on-year decrease. However, on a seasonally adjusted month-on-month basis, there was a modest recovery in total trade, growing by 2.2%, signaling some market corrections.

Amid these declines, the rise in oil domestic exports on a year-on-year basis in March was 2.0%, though in volume terms, there was a 2.5% decrease. This increase in oil exports was supported by significant increases in exports to Indonesia, Liberia, and the Marshall Islands.

It’s interesting how ES had earlier forecasted that the growth for Singapore’s non-oil domestic exports (NODX) would be between 4.0% and 6.0% for 2024.

Given the results from March, it would require exceptionally strong export performance in the following months for this previous forecast to materialize.