Senior Economist at UOB Group Alvin Liew reviews the latest NODX figures for the past year.

Key Takeaways

“Singapore’s non-oil domestic exports (NODX) headline again came in worse than even our pessimistic forecast, falling sharply by -20.6% y/y in Dec from the revised -14.7% in Nov, the third straight month of contraction after 22 months of unabated expansion. On a seasonally adjusted sequential basis, NODX fell 3.3% m/m in Dec compared to -9.2% in Nov. This is the fifth consecutive m/m decline for NODX and the longest of such down stretch since end-2008/early 2009.”

“Both electronics and non-electronics exports fared poorly in Dec, just like Nov. The difference is that the fall in electronics exports was -17.9% y/y (compared to -20.2% in Nov), the fifth consecutive month of y/y contraction. In comparison, non-electronics fell deeper by -21.3% y/y (from -12.8% in Nov), the third consecutive decline after 13 months of gains. Importantly, the nominal values of both integrated circuits and pharmaceutical exports fell to significantly low levels. Exports to major destinations also reflected the weaker global demand backdrop, as only two markets reported positive y/y outcomes in Dec, with the weakness in China and ASEAN regional demand especially concerning.”

“NODX Outlook – The cracks in the export outlook became more visible now with the consecutive and deeper y/y contractions. We are likely to see a few more months of y/y declines in NODX for 1H 2023 before factoring an improvement in the second half of the year. We expect full year NODX to contract by -5.5% in 2023.”