SINGAPORE’S key exports grew for the first time in November after 13 straight months of contractions. This followed a surge in the shipping of pharmaceutical products, data from Enterprise Singapore (EnterpriseSG) showed on Monday (Dec 18).

Non-oil domestic exports (NODX) rose by 1 per cent year on year (yoy) in November, improving from the upwardly revised 3.5 per cent contraction in the previous month.

This came shy of private-sector economists’ expectations of a 1.5 per cent yoy growth, a Bloomberg poll indicated.

Favourable base effects likely played a role in improving NODX for the first time this year, said economists, and any recovery ahead is likely to be fragile.

“The question now is whether this represents a temporary or extended pause in the external sector’s recent better trend. We suspect it will be the latter,” said Alex Holmes, lead Asia economist at Oxford Economics.

“Exporters will struggle for momentum over the coming quarters,” he added.

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On a seasonally adjusted month-on-month basis, however, NODX inched up just 0.3 per cent to S$15 billion – easing significantly from October’s 5.7 per cent increase.

Exports of non-electronic products grew 5.2 per cent yoy, improving from the 2.9 per cent decrease in October. Pharmaceutical exports surged 118.9 per cent, while non-monetary gold shipments jumped 106.5 per cent.

Electronics exports shrank 12.7 per cent yoy in November, deepening from the 5.6 per cent decline in the previous month. This was attributed mainly to the fall in shipments of integrated circuits, PCs and diodes, said EnterrpiseSG.

But economists were not overly concerned by the slip in electronics exports.

“We are inclined to chalk this up to volatility,” said Brian Tan, regional economist at Barclays. “While perhaps not as heavily exposed as South Korea or Taiwan, Singapore should nonetheless still benefit from the gradual tech cycle recovery in the region.”

DBS economist Chua Han Teng added: “While electronics NODX continued to shrink in yoy terms, we see an improving trend on a three-month moving average yoy basis.”

That figure, he said, narrowed to 10 per cent in November, the best performance in about a year.

OCBC chief economist Selena Ling said a turnaround in global electronics demand is still being anticipated for 2024.

“Generative AI (artificial intelligence) may provide some tailwinds into next year, but a recovery in PC and 5G smartphone demand will be pivotal to bolster the industry outlook after an extended down cycle,” she said.

UOB economists Alvin Liew and Jester Koh believe the electronics trade cycle has likely bottomed, with recovery in the next few quarters supported by base effects.

NODX to six of Singapore’s top 10 markets shrank in November, led largely by the decline in Taiwan, the eurozone and Indonesia.

Exports to Taiwan tumbled 40 per cent yoy, extending the 43.7 per cent slump in October.

Conversely, exports to Hong Kong, Thailand and China remained positive, with the best improvement being the 49.6 per cent yoy jump in shipments to Thailand.

Shipments to the United States grew by 20.5 per cent yoy, reversing the 13.6 per cent contraction in the previous month.

Total trade grew 0.3 per cent yoy in November, on a par with the previous month.

OCBC’s Ling said she expects full-year NODX to shrink 12.5 per cent yoy, while the UOB team lowered its projection to 12.6 per cent. These come in at the lower end of the official NODX outlook range of 12 to 12.5 per cent.

Ling also pointed out that year-to-date NODX has thus far contracted 13.6 per cent yoy, and a 12.5 per cent contraction would make 2023 the worst-performing year since 2001.

However, both OCBC and UOB are more optimistic about exports in 2024 than the authorities’ 2 to 4 per cent yoy outlook. OCBC’s forecast is 4 to 6 per cent, whereas UOB’s is 6 per cent.

The UOB economists said recovery in NODX is likely to be largely driven by base effects, given the sharp double-digit yoy decline from November 2022 to September 2023, but added that headwinds still persist.

Ling said her forecast is based on the assumption that global demand stabilises, the global monetary policy cycle pivots to an “easing bias” and geopolitical tensions do not worsen.