Singapore sees continued trade growth at 10.2% in Q2

Oil trade expanded 23.2% due to higher oil prices.

Total merchandise trade in Singapore recorded a 10.2% YoY expansion in Q2, which is a significant advance from the 2.5% YoY increase in Q1 amidsts oil and non-oil trade growth, Enterprise Singapore revealed.

“Similar to the last update, NODX and total trade growth are expected to remain firm in 2018 but may ease from 2017’s pace,” the agency said.

The 23.2% expansion in oil trade amidst higher prices is a significant increase from the 5.1% growth in the previous quarter. Meanwhile, non-oil trade rose 7.1% in Q2 from a 1.9% increase in Q1.

On a QoQ seasonally adjusted (SA) basis, total merchandise trade recorded a 7.3% growth in Q2 from a decline of 1.6% in Q1. Meanwhile, oil and non-oil trade rose 9.9% and 6.6% QoQ, respectively.

For non-oil exports (NOX) inched up 7.3% in Q2 from 1.3% in Q1. NOX includes both non-oil domestic exports (NODX) and non-oil re-exports (NORX). NOX increased by 6.5% QoQ in Q2 after a 0.6% growth in the previous quarter.

Meanwhile, NODX rose 9.4% YoY in Q2 driven by non-electronic exports which grew 16.6% for the fourth consecutive quarter whilst domestic exports of electronics declined 7.6%.

In terms of electronics, ICs, parts of PCs, and diodes & transistors slipped 11.3%, 36.3% and 15.2% respectively.

On the other hand, domestic exports of non-electronic products expanded 16.6% over the year in Q2 2018, continuing the the 4.6% growth trend in Q1. The gains in non-electronic NODX were food preparations (+133.1%), civil engineering equipment parts (+324.2%) and pharmaceuticals (+31.8%).

For total services trade, Singapore saw a growth rate of 3% to $119.3b in Q2 after the 4.3% increase in the previous quarter. Both services exports and imports growth rose 3.8% and 2.1%, respectively.

Services exports rose by 3.8% on a y-o-y basis in 2Q 2018, following the 5.2% growth in the preceding quarter. The growth in services exports can be attributed to the increase in exports of transport services (+4.1%), receipts from charges for the use of intellectual property (+18.3%) and financial services (+5.9%)

Enterprise Singapore mentioned that the International Monetary Fund maintained its 2018 global growth forecast at 3.9%, though the projections for the Euro area, Japan and the United Kingdom have been revised downwards, with growth for Singapore’s key trade partners such as China, the NIEs and ASEAN-5 projected to moderate slightly or remain unchanged from 2017.

“Meanwhile, downside risks such as trade tensions, rising global interest rates and tightening financial conditions may weigh on global growth and trade flows,” the agency noted.

With this, Enterprise Singapore believes that the country’s 2018 growth projections for total trade and NODX could inch up to 5% to 6%, and 2.5% to 3.5%, respectively.