Singapore’s key exports declined less sharply last month but economists said external demand is unlikely to pick up anytime soon because of the turmoil in the US banking sector and its spillover impact on other banks. Non-oil domestic exports (Nodx) for February shrank 15.6 per cent from a year ago, after falling by 25 per cent in January and 20.6 per cent in December, data from Enterprise Singapore (EnterpriseSG) on Friday showed. The number was close to forecasts from Bloomberg and Reuters - analysts polled were expecting Nodx to fall by 16 per cent year-on-year. It is also the fifth straight month of year-on-year decline for Singapore’s key exports as both electronic and non-electronic shipments fell. ANZ head of Asia research Khoon Goh said the timing of Chinese New Year had exaggerated the January weakness. Mr Goh added that goods exports remained very weak, with “Nodx now at its lowest levels since June 2019”. Electronic products, which accounts for around a quarter of domestic exports, contracted another 26.5 per cent in February, a slight improvement from the 26.8 per cent slump in January. Integrated circuits, disk media products and capacitors contributed the most to the fall in electronic shipments. Non-electronic products shrank less sharply in February, slipping 12.1 per cent after contracting 24.5 per cent in January. Structures of ships and boats, petrochemicals and pharmaceuticals contributed the most to the decline.

On a month-on-month and seasonally adjusted basis, Nodx slipped back into negative territory in February, sliding 8 per cent to $13.3 billion, after the previous month’s 0.9 per cent growth. The drop was worse than the 0.5 per cent forecast in Bloomberg’s poll of analysts. ANZ’s Mr Goh said goods exports will be a big drag on economic growth, but services exports (due to tourism) will help to make up for some of the shortfall. Singapore is one of the most export-driven economies in the world, with an exports to gross domestic product ratio of about 180 per cent. Breaking down by export markets, shipments to Singapore’s top ten markets declined as a whole in February. The falls were led by double-digit drops in exports to the European Union, Hong Kong and Taiwan. In particular, shipments to the EU reversed the previous month’s gains to fall 34.2 per cent, due mainly to falls in exports of pharmaceuticals, petrochemicals and disk media products. Intra-regional trade improved slightly as shipments to Thailand rebounded and shipments to Indonesia and Malaysia did not contract as badly as in January.

Exports to China remained in the red, but the decline narrowed in February, down 11.3 per cent compared to the previous month’s 41.1 per cent fall. The United States was a bright spot for Singapore’s exports, as shipments rebounded 8.7 per cent after falling in January and December. The Government’s Nodx forecast for 2023 is for minus 2 per cent to 0 per cent growth. Mr Goh said the poor export outlook is not a major consideration for the Monetary Authority of Singapore (MAS) when it meets in April. ANZ expects MAS to tighten policy further as “inflation remains the dominant concern” for the central bank.