SG NODX to contract 5.5% in 2023

It is due to the broad-based weakness in electronics and non-electronics performance.

UOB expected Singapore's non-oil domestic exports (NODX) to shrink by 5.5% in 2023.

Their Macro Note for NODX stated the broad-based weakness in both the country's electronics and non-electronics performance continued to weigh negatively on its manufacturing demand, notwithstanding the volatile nature of the pharmaceutical export.

"We continue to expect weakness in global demand on the back of further monetary policy tightening and worries about an economic slowdown in the developed markets," UOB said.

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UOB also said that they see a few year-over-year declines in NODX in the next few months of the first half of 2023 before factoring in some improvement in the second half.

The report then reiterated a warning from the Monetary Authority of Singapore's Monetary Policy Statement, saying whilst the boost to demand in most of the regional economies from their reopening last year will fade, the global electronics industry is in a sharp downturn and that the drag on investment and manufacturing from tighter financial conditions will intensify in the coming quarters of 2023.

The regulatory board also sees the lower spillover benefits from China's rebound as mostly being consumption-driven and oriented towards domestic services.