Singapore Releases Trade Performance Outlook For 2010
Review Of 3Q 2009 Trade Performance & Outlook For 2009 & 2010.
On a quarter-on-quarter seasonally adjusted (q-o-q SA) basis, Singapore’s total trade rose by 8.4 per cent in 3Q 2009, following the 3.7 per cent increase in 2Q 2009.
Trade Highlights:
- On a year-on-year (y-o-y) basis, Singapore’s total trade declined by 21 per cent in 3Q 2009 after the previous quarter’s decrease of 27 per cent.
- On a q-o-q SA basis, non-oil domestic exports (NODX) increased by 5.9 per cent in 3Q 2009, after a rise of 7.4 per cent in 2Q 2009.
- On a y-o-y basis, NODX declined by 7.8 per cent in 3Q 2009 after the previous quarter’s decrease of 14 per cent.
- Projected total trade growth in 2009 is narrowed to between -22 and -21 per cent from the previous forecast of -23 to -21 per cent while NODX growth is narrowed to between -11 to -10 per cent from the previous forecast of -12 to -10 per cent. The projection for total trade in 2010 is between 7.0 and 9.0 per cent.
TOTAL TRADE
On a q-o-q SA basis, Singapore’s total external trade increased by 8.4 per cent in 3Q 2009 following the previous quarter’s rise of 3.7 per cent in 2Q 2009.
On a y-o-y basis, Singapore’s total external trade contracted by 21 per cent in 3Q 2009, after the 27 per cent decline recorded in the previous quarter. The level of total trade reached $199 billion in 3Q 2009, higher than the previous quarter’s achievement of $178 billion. Total exports and total imports declined by 20 per cent and 23 per cent respectively in 3Q 2009.
Total trade’s y-o-y decline in 3Q 2009 can be attributed to lower oil and non-oil trade. Oil trade contracted by 36 per cent y-o-y in 3Q 2009, following the previous quarter’s 44 per cent decline. Non-oil trade decreased by 15 per cent in 3Q 2009, after the 20 per cent contraction in 2Q 2009. Details on the performance of major trade components and key trading markets can be found in Annexes A, B and C.
NON-OIL DOMESTIC EXPORTS
On a q-o-q SA basis, non-oil domestic exports (NODX) increased by 5.9 per cent in 3Q 2009, after the previous quarter’s rise of 7.4 per cent.
On a y-o-y basis, NODX decreased by 7.8 per cent in 3Q 2009, following the 14 per cent contraction registered in 2Q 2009, on lower shipments of electronic and non-electronic NODX. Electronic domestic exports decreased by 14 per cent in 3Q 2009, following the previous quarter’s 23 per cent decline. Non-electronic NODX declined by 3.5 per cent in 3Q 2009, following the 8.8 per cent contraction in the previous quarter.
NODX to all top 10 NODX markets except Taiwan, Hong Kong and South Korea contracted in 3Q 2009. The biggest contributors to the NODX decline in the quarter were the United States, Indonesia and the EU 27. Specifically, NODX to the United States decreased by 17 per cent in 3Q 2009, following the 26 per cent decline in 2Q 2009. NODX to Indonesia contracted by 22 per cent in 3Q 2009, following the previous quarter’s decrease of 26 per cent. NODX to the EU 27 also declined by 11 per cent in 3Q 2009 after the previous quarter’s contraction of 26 per cent (See Annex D).
PRODUCTS
Electronic products.On a y-o-y basis, domestic exports of electronics (comprising 37 per cent of NODX) contracted by 14 per cent in 3Q 2009, following the decrease of 23 per cent in 2Q 2009. The decrease in electronic NODX can be attributed to lower domestic exports of parts of ICs (-41 per cent), parts of PCs (-14 per cent) and ICs (-8.5 per cent) (See Annex E).
Non-electronic products.On a y-o-y basis, domestic exports of non-electronics (comprising 63 per cent of NODX) declined by 3.5 per cent in 3Q 2009 after a contraction of 8.8 per cent in 2Q 2009. The decline in non-electronic NODX was led by lower domestic exports of petrochemicals (-22 per cent), other specialty chemicals (-27 per cent) and heating & cooling equipment (-53 per cent) (See Annex E).
OIL DOMESIC EXPORTS
On a q-o-q SA basis, oil domestic exports increased by 22 per cent in 3Q 2009 after a marginal decrease of 0.7 per cent in 2Q 2009.
On a y-o-y basis, oil domestic exports declined by 42 per cent in 3Q 2009 after a 46 per cent contraction in 2Q 2009. In volume terms, oil domestic exports decreased by 1.9 per cent in 3Q 2009, compared to the marginal 0.1 per cent increase in 2Q 2009. (See Annex F).
NON-OIL RE-EXPORTS
On a q-o-q SA basis, non-oil re-exports (NORX) increased by 5.7 per cent in 3Q 2009, following a rise of 0.5 per cent in 2Q 2009.
On a y-o-y basis, NORX contracted by 17 per cent in 3Q 2009, after a 20 per cent decline in the previous quarter. The NORX decline can be attributed to lower shipments of electronic and non-electronic NORX. Electronic NORX contracted by 19 per cent in 3Q 2009, after the 24 per cent decrease in 2Q 2009, weighed down by lower re-exports of parts of PCs (-35 per cent), diodes & transistors (-40 per cent) and telecommunications equipment (-37 per cent). Non-electronic NORX contracted by 15 per cent in 3Q 2009, after the previous quarter’s decline of 16 per cent. The decline in non-electronic NORX was due to lower re-exports of civil engineering equipment parts (-26 per cent), disk media products (-69 per cent) and primary chemicals (-54 per cent).
NORX to the top 10 NORX markets except South Korea contracted y-o-y in 3Q 2009. In particular, the markets making the largest contributions to NORX contraction were Indonesia, Malaysia and China. NORX to Indonesia declined by 24 per cent in 3Q 2009, after the 28 per cent decrease in 2Q 2009. NORX to Malaysia decreased by 18 per cent in 3Q 2009, following the 29 per cent contraction in the previous quarter. NORX to China also declined by 20 per cent in the quarter after the 23 per cent decrease in 2Q 2009 (See Annex G).
OUTLOOK FOR 4Q 2009 AND YEAR 2010
The 25 per cent decline in total trade in the first three quarters of 2009 was due to declines in both oil and non-oil trade. Oil trade was down 40 per cent on the same period in 2008 due to substantially lower oil prices. Meanwhile, non-oil trade declined by 20 per cent in the first three quarters, due to declines in both NODX and NORX of 16 and 20 per cent respectively. This was mainly due to lower shipments of electronics (see Annex E).
The global economy has shown tentative signs of growth, with all members of the G3 growing in the third quarter of 2009. However, the pace of growth is uneven, especially for advanced economies, and recovery is expected to be sluggish. Continued high unemployment in advanced economies and tight credit conditions are expected to result in weak external demand for the rest of 2009. The IMF, in its latest October 2009 World Economic Outlook report, upgraded its growth estimate of 2009 global GDP from a contraction of 1.4 per cent, announced in July 2009, to a decline of 1.1 per cent. The IMF also expects the volume of global trade in goods and services to now decline by nearly 12 per cent in 2009.
Projected total trade growth in 2009 is narrowed to between -22 and -21 per cent from the previous forecast of -23 to -21 per cent while NODX growth is narrowed to between -11 to -10 per cent from the previous forecast of -12 to -10 per cent. There are stronger signs of stabilisation in external demand, but the levels are still low. For the last quarter of 2009, Singapore’s trade is expected to continue on its path of recovery.
The projection for total trade in 2010 is between 7.0 and 9.0 per cent, mainly due to higher projected oil prices in 2010 as compared to 2009, and an expected recovery in global demand. The key factors contributing to the outlook for 2010 are as follow:
- Growth of regional markets is likely to be positive
Key Asian economies are likely to register positive growth in 2010. Growth in larger Asian economies is expected to be boosted by domestic demand. China’s expected strong growth in 2010 (the IMF projects China to grow by 9.0 per cent in 2010) will contribute towards the growth of Asian economies. This growth will also help support Singapore’s trade growth, even with a weak recovery in demand from developed markets.
- Slow recovery in economic performance of advanced economies
Developed economies are expected to register sluggish growth in 2010, with the IMF projecting that the US economy will grow by 1.5 per cent. Hence, demand from developed economies is not expected to reach the levels seen in the middle of this decade.
- Global electronic demand in 2010 is expected to improve
Global semi-conductor sales are expected to improve in 2010, rising by around 10 per cent, according to recent forecasts by major semiconductor industry and IT analysts.
- Oil prices will rise compared to 2009
Oil prices in 2010 are projected to be around $74 per barrel. Singapore’s oil trade growth is projected to improve in 2010 on higher oil prices.
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Topics: Asian economies, China, domestic exports, economic development, economic growth, Economy, External Trade Figures, Governance, IMF, NODX, non oil domestic exports, Oil Domestic Exports, Products, regional markets, Singapore, total trade, trade, trade performance
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