SINGAPORE’S key exports in January far exceeded market expectations with a 16.8 per cent year-on-year (yoy) jump, lifted by a surge in the shipment of non-monetary gold, data from Enterprise Singapore (EnterpriseSG) showed on Friday (Feb 16).

Private-sector economists polled by Bloomberg had expected non-oil domestic exports (NODX) to grow 4.3 per cent yoy.

January’s performance was an improvement over the 1.5 per cent yoy dip in December. It also benefited from the low base a year ago, when there was a 25.1 per cent yoy slump during the Chinese New Year period in January.

On a seasonally adjusted monthly basis, NODX grew 2.3 per cent in January to S$14.9 billion, from the 1.7 per cent contraction in the previous month.

While both electronic and non-electronic exports grew in January, the former rose by a paltry 0.7 per cent yoy – the first growth since July 2022 and a turnaround from the 11.7 per cent yoy contraction in December.

Non-electronic exports surged 21.2 per cent yoy, notably due to a whopping 198.7 per cent yoy jump in non-monetary gold shipments, largely to China and Hong Kong. There was also a 41.1 per cent yoy boost in specialised machinery exports.

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NODX to Singapore’s top markets as a whole expanded in January, with China, Hong Kong and the United States contributing the most to the growth.

Exports to China more than doubled in January from the corresponding period the year before. December recorded 22.2 per cent yoy growth. In nominal terms at current prices, NODX to China hit S$3.35 billion, the highest level since August 2020.

NODX to Hong Kong jumped 60.8 per cent yoy in January, extending the 36.1 per cent yoy growth in the previous month.

On the other hand, exports to the eurozone shrank by 42.4 per cent yoy, undoing the 8.6 per cent yoy growth in December.

Shipments to Taiwan, Japan and Thailand also continued to shrink in January.

Some economists said January’s export data signalled the start of a “long-awaited” rebound in Chinese demand.

“Demand from China looks to be improving, with NODX to China and Hong Kong having expanded yoy for five consecutive months,” said Maybank economists Chua Hak Bin and Brian Lee.

HSBC Asean economist Yun Liu noted that the boost from mainland China alone accounted for three-quarters of January’s NODX growth.

“If we look at NODX momentum, NODX to mainland China rallied by over 40 per cent yoy on a three-month moving average, followed by the US, more than offsetting weakness to the EU and Asean-3,” she said. (Asean-3 refers to Indonesia, Malaysia and Thailand within the South-east Asian bloc.)

Overall, total trade grew 14.1 per cent yoy in January, compared with a 6.8 per cent yoy decline in the preceding month.

Just the day before, EnterpriseSG upgraded its full-year forecast for NODX, with “modest growth” projected in the year ahead and an expected recovery in electronics.

HSBC’s Liu said electronics NODX has “clearly bottomed out”, thanks to recovering prices in key semiconductors, specifically 3D NAND for Singapore.

“Based on historical trends, semiconductor NODX can rebound fairly quickly from a tech downturn,” she said.

“Meanwhile, electrical machinery NODX’s return to meaningful growth after a year also signals some hopes for the long-anticipated turnaround in the global trade cycle.”

Overall, Liu said, the worst of Singapore’s trade slump is over, and that the new year should bring green shoots, even if modest ones.

However, other economists were more cautious, citing ongoing downside risks.

“We expect a gradual and fragile exports recovery in 2024, with greater near-term volatility,” said DBS economist Chua Han Teng, adding that global economic uncertainties bear watching.

UOB economists Alvin Liew and Jester Koh said the recovery in NODX will be largely driven by base effects, given the sharp double-digit yoy decline in electronics NODX from November 2022 to September 2023.

Still, the sequential recovery could be challenging in the first half of this year, given tight financial conditions in the US and the EU, they added.

UOB’s full-year NODX outlook is 6 per cent, at the upper bound of EnterpriseSG forecast.

Maybank is predicting full-year growth of 7 to 9 per cent, owing to improving demand from China and a continued recovery in aggregate exports indicated by Singapore’s Purchasing Managers’ Index in January.