- POSTED: 17 Jan 2014 08:33
- UPDATED: 18 Jan 2014 00:02
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Singapore's non-oil domestic exports (NODX) rose by a better-than-expected 6 per cent in December 2013, rebounding from the sharp decline in the previous month.
SINGAPORE: Singapore's non-oil domestic exports (NODX) rose 6 per cent on-year in December 2013, a rebound from the sharp 8.9-per cent decline in the previous month.
According to trade data from IE Singapore on Friday, it is largely driven by the increase in non-electronic exports, outweighing the decline in electronic exports.
Stronger shipments to the top three export markets - China, the US and Taiwan - supported the increase.
NODX to China grew by 45 per cent in December, following a 16-per cent expansion the previous month, led by petrochemicals, specialised machinery and household goods.
Meanwhile, NODX to the US increased by 27.9 per cent in December after the 10.3-per cent growth in November.
Exports to Taiwan rose by 12.6 per cent compared to the 5.4-per cent expansion the previous month.
In particular, exports of non-electronic products grew by 10.6 per cent, outweighing the 3.1-per cent decline in electronics exports.
Francis Tan, economist at United Overseas Bank, said: “We do see positive signs in non-PC related clusters, such as integrated circuits and semiconductors, so these will likely gain a bigger share as a total of electronics output and exports."
Irvin Seah, senior economist and senior VP of economic & currency research at DBS Bank, said: “We're seeing improvement in high-end segments, but we're seeing a drag or structural decline in lower value added segments mainly due to regional competition.
“As plants move production out of Singapore into some lower-cost destinations, this explains this kind of hollowing out and declining performance in the electronics segment. Going forward, perhaps in the next five to 10 years, we can see Singapore's electronics being cornered to a niche market.”
Experts expect January NODX figures to ease due to a seasonal lull, but the outlook for the year is optimistic.
Mr Tan said: “We're likely going to see positive GDP growth in the G3 countries, and that is the US, Europe and Japan. These G3 countries are very important because they account for a large part of the final consumption demand for the exports from Singapore.
“For the US, we think growth will be coming in at 3 per cent. US, remaining a big trading partner with Singapore, and they being a huge trading partner with China, we think the overall export growth in Singapore this year will likely be supported by the economic consumption demand in the G3 countries this year."
While exporting companies will benefit as the global economy improves, some economists warn that local manufacturers may continue to struggle with cost pressures due to internal restructuring.