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SINGAPORE: Singapore's non-oil domestic exports (NODX) surged in February, boosted by increased pharmaceuticals and petrochemicals exports.
Data released on Wednesday by trade promotion agency IE Singapore showed that NODX rose by 23 per cent on-year in February.
This is higher than the 21 per cent on-year hike in January, and better than the 18.4 per cent increase that economists had expected.
Compared to the previous month, NODX rose 15 per cent in February.
IE Singapore said the good showing was due to both electronic and non-electronic NODX rising. Electronics products exported increased 26.4 per cent on-year to S$4.4 billion, after a 22.7 per cent gain the previous month.
Non-electronics shipments, which include petrochemicals and pharmaceuticals, were up by 21.8 per cent on-year to S$7.6 billion. Pharmaceutical goods climbed by 29 per cent on-year, rebounding from a 29.7 per cent on-year decline in January.
The strong growth in electronics exports was in line with the recovery for the industry in the region, said analysts.
David Cohen, director of Asian economic forecasting at Action Economics, said: "There was the continued improvement in electronics. That was up about 26% year-on-year, and that parallels the steady improvement that we've been seeing in data for the electronic industry around the region - Taiwan, South Korea, China and Japan have all been showing an encouraging rebound from the weakness a year earlier. It's just a sign that global demand is recovering and is continuing into 2010."
Analysts said the short month of February could also have also contributed to the headline number.
Irvin Seah, economist at DBS Bank, said: "Base effect did come into play. In the aftermath of the export meltdown, export demand collapsed. That hit Singapore's export performance significantly. Because of that low base, it actually resulted in this strong year-on-year number.
"But on a sequential basis, this 15% month-on-month growth is still commendable and very good growth. We also have to bear in mind that February is a shorter month. The fact that we can clock such strong numbers despite a shorter month basically tells a lot about the strength of this underlying demand in the global economy."
Observers believe the pharmaceuticals sector will continue to contribute strongly in the coming months.
Mr Seah said: "We have some new plants coming on-stream, starting their operations and their production. Therefore this capacity expansion will likely bring about significant improvements in terms of production and also sales subsequently.
"Bear in mind that we probably won't see such strong numbers as we've seen last year, because last year the strong pharmaceutical export numbers were essentially on the back of the H1N1 effect, and this year we are not seeing that coming in. Sales will still be good, but it will be volatile from time to time, but overall there will still be decent numbers for pharmaceuticals."
In terms of export markets, NODX to all of Singapore's top 10 partners increased. In particular, NODX to Taiwan jumped by 124 per cent, while exports to Indonesia soared 71 per cent and shipments to the European Union were up 35 per cent.
Singapore's NODX to the US also improved by 5.7 per cent while those to China increased 9.3 per cent.
Analysts said the improved numbers could give room for the Singdollar to appreciate.
Mr Cohen said: "One of the interesting angles that we might be watching is how the MAS is going to respond to this. The continued encouraging recovery might make for an interesting decision next month when they come to decide whether to resume the appreciation of the Singdollar to a basket of currencies.
"Remember, before the crisis, Singapore had been allowing a gradual appreciation of the currency to help hold down inflation, but with the onset of the global downturn, the MAS (Monetary Authority of Singapore) allowed the exchange rate to steady, wanting to help boost the economic recovery.
"Now with the economy recovering, people are waiting to see if in their semi-annual review in April, they'll renew the appreciation, or as we think, they'll wait one more period and maybe wait till October before they allow it to start appreciating again."
Observers believe the latest NODX numbers put Singapore on track to achieving the upper range of its economic growth forecast of between 4.5% and 6.5% this year.
- CNA/sc/ir
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