Overview of Singapore’s Non-Oil Domestic Exports (NODX) Performance

Singapore’s non-oil domestic exports (NODX) began 2025 on a weaker note, declining by 2.1% year-on-year (yoy) in January. This contraction was far below Bloomberg’s consensus estimate of 0.3% growth and only slightly better than CGS International’s forecast of -2.6% yoy. The main drag on NODX was the non-electronics sector, which dropped by 4.8% yoy due to sharp declines in pharmaceuticals (-53.0%), specialized machinery (-9.9%), and miscellaneous manufactured articles (-20.0%).

On the other hand, the electronics sector continued to grow positively, albeit at a slower pace of 9.6% yoy. Despite its growth, electronics were unable to offset the significant decline in non-electronics exports.

Tariff Pressures and Global Trade Dynamics

Ongoing tariff uncertainties are expected to temper the NODX outlook beyond the first quarter of 2025. Several key tariff announcements in recent months are shaping the trade environment:

• A flat 10% tariff on China, effective February 4, 2025.
• A 25% tariff on Mexico and Canada, starting March 4, 2025.
• A 25% tariff on steel and aluminum imports to the US, effective March 12, 2025.
• The implementation of reciprocal tariff rates, scheduled for April 1, 2025.
• President Trump’s announcement of higher tariffs on Taiwanese semiconductors.

The report suggests that these tariffs are part of broader geopolitical maneuvers, potentially aimed at issues like immigration and trade negotiations. The ultimate impact of these measures may be less severe than initially feared, but retaliatory tariffs from other countries could disrupt supply chains.

Sector-Specific Analysis

Electronics Sector: Growth Driven by AI

The electronics sector continues to expand, supported by the booming artificial intelligence (AI) industry. This trend is expected to maintain strong export performance throughout 2025. Notably, certain segments within electronics experienced fluctuations:

• Integrated Circuits (ICs): Declined by 7.3% yoy in January, after a 4.0% dip in December.
• Disk Media Products: Surged by 71.9% yoy, continuing robust performance from December’s 52.1% growth.
• PCs: Grew by 20.7% yoy, reflecting strong demand, though slower than December’s 25.0% growth.
• Other Computer Peripherals: Showed an impressive 311.4% yoy growth, driven by increased demand for advanced computing hardware.

Despite these bright spots, several subcategories like telecom equipment (-52.2% yoy) and PC parts (-44.4% yoy) faced significant declines.

Non-Electronics Sector: Pharmaceuticals and Machinery Drag Performance

The non-electronics sector contracted by 4.8% yoy in January. Pharmaceuticals were the largest drag, plummeting by 53.0% yoy due to weaker global demand. Other notable declines included specialized machinery (-9.9%) and miscellaneous manufactured articles (-20.0%). Petrochemicals, however, managed to stay relatively stable, with only a slight decrease of 0.2% yoy.

Export Performance by Country

Singapore’s export performance varied significantly across key trading partners:

• China: Exports to China dropped sharply by 48.4% yoy, reflecting weaker demand.
• United States: Shipments surged by 27.8% yoy, buoyed by front-loading amid tariff uncertainties.
• Hong Kong: Exports saw a significant 113.3% yoy increase, highlighting strong regional trade links.
• European Union: Exports fell by 7.3% yoy, impacted by slower economic growth in the region.
• South Korea: Exports rose by 9.9% yoy, driven by strong demand for electronics.
• Taiwan: Exports jumped by 48.3% yoy, reflecting robust semiconductor trade.

Key Forecasts and Recommendations

Despite challenges, CGS International maintains a 4.0% yoy growth forecast for NODX in 2025. The electronics sector is expected to remain a key driver, supported by advancements in AI and robust global demand. However, the report warns of potential disruptions from retaliatory tariffs and geopolitical tensions.

Businesses are advised to monitor trade developments closely and consider diversifying their export markets to mitigate risks.