March 17, 2017 5:27 pm JST

Singapore February core exports rise for fourth straight month

Non-oil domestic exports to China soared 65.1% on year following a 36.9% rise in January

SINGAPORE (NewsRise) - Singapore's non-oil domestic exports (NODX) rose for the fourth straight month in February, boosted by the timing of the Lunar New Year holidays and stronger shipments to China as a recovery in global trade gained momentum.

February's non-oil domestic exports amounted to a seasonally adjusted 15.1 billion Singapore dollars ($10.8 billion) - a rise of 21.5% from a year ago - that was more than double January's expansion of 8.6%. The increase was the fastest since exports began their recovery in November last year, trade agency International Enterprise Singapore said on Friday.

IE Singapore said non-oil domestic exports to all the Southeast Asian city-state's 10 largest markets rose, with China showing the largest expansion of 65.1% "led by non-monetary gold, petrochemicals and specialised machinery". Exports to China, which is Singapore's largest market, had grown by 36.9% year-on-year in January.

Shipments to the European Union rose by 28.7%, reversing the 25.2% decline in January, while Taiwan bought 54.0% more products from Singapore, slowing from an increase of 75.3% in the previous month. The EU and Taiwan were the city-state's largest export markets after China in February.

In terms of product category, non-oil domestic exports of electronics grew 17.2% in February from a year ago, and petrochemicals shipments rose 45.3%.

"The encouraging export picture in February was due to a combination of a shift in the Chinese New Year holiday and the recovery in chip (semiconductor) sales, supported by steadying chemicals," said Song Seng Wun, an economist at CIMB Private Bank.

"Nonetheless, Singapore's latest export picture is consistent with improving regional and global exports," he added.

There were more working days in February 2017 compared to a year ago, as Chinese New Year was in January this year, while it was in February last year.

When the January and February figures are combined, non-oil domestic exports from the city-state rose by around 15% from a year, according to Song.

Singapore tracks non-oil domestic exports as they provide a better gauge of economic activity. This is because prices of refined oil products tend to be volatile, while total exports include the billions of dollars of goods produced elsewhere that are shipped through Singapore's mega container port.

Maybank Kim Eng's economist Chua Hak Bin, in a note earlier this week, said the world is now going through a "synchronized" global recovery, unlike in previous years when the rest of the world faced sluggish and divergent growth relative to the United States.

"Since late last year, Asia has seen a robust recovery in exports and trade-related services, lifting the fortunes of trade-dependent economies. This includes Korea and Taiwan in Northeast Asia, and Singapore, Malaysia and Thailand in Southeast Asia, where exports account for a larger proportion of GDP," he said.

Taiwan earlier this month said February exports jumped 27.7% from a year earlier, their fastest pace in six years, while South Korea reported a 20.2% growth last month, led by a 57% on-year surge in semiconductor shipments.

Economists have turned bullish about Singapore's growth prospects this year, following a surge in manufacturing output in recent months.

A quarterly survey released on Wednesday by the Monetary Authority of Singapore showed economists now expect gross domestic product to grow 2.3% in 2017, up from the median estimate of 1.5% in the previous survey.

The city-state's GDP expanded by 2.0% last year and authorities have projected growth of between 1% and 3% this year.

Singapore's non-oil domestic exports fell 2.8% in 2016, following a 1.5% gain in 2015.

--Kevin Lim

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