Singapore’s non-oil domestic exports (NODX) and manufacturing output have been facing declines, reflecting the performance of key economic sectors. This year, both indicators have shown weakness due to sluggish global demand, though September data indicates a moderation in the rate of decline.

NODX represents the goods produced domestically, which are critical for Singapore’s export-oriented economy. As such, its figures are closely tied to global demand, which has been weak recently, particularly in the electronics sector. Although September saw a slower decline in year-on-year NODX, the overall outlook remains fragile, impacted by continued uncertainty in global markets and tight monetary policies in regions like the US and EU.

Understanding NODX and Manufacturing Output
NODX includes domestically produced goods, excluding oil, which is separated due to its volatility and significant share of total exports. In 2022, oil domestic exports amounted to S$130 billion, while NODX reached S$199 billion, illustrating the importance of monitoring these figures. Furthermore, NODX is split into electronics and non-electronics, with electronics constituting a significant share of total exports.

The decline in NODX, which began in September 2022, has been influenced by decreasing global demand for electronics. In September 2023, electronics shipments fell for the 14th consecutive month, though the decline was less severe than in previous months. Other sectors, such as non-monetary gold and pharmaceuticals, also experienced substantial decreases.

Manufacturing output, a critical component of Singapore’s GDP, has seen a year-on-year decline for 12 consecutive months, although the drop in September was less severe than the previous month. A monthly rebound of 10.7% in manufacturing output provides some hope for recovery, particularly as semiconductor companies expect demand to rebound in the coming quarters.

Economic Outlook and Implications
The performance of NODX and manufacturing is vital for overall economic growth, with both indicators expected to influence GDP performance. While economists predict that NODX will remain negative for the rest of the year, some believe a gradual recovery could occur by year-end. The impact of these exports on GDP growth remains uncertain, with some analysts suggesting they may act as a drag on growth through Q4 and into 2024.

Despite these challenges, the Singapore government remains optimistic about the overall growth for the year, forecasting a positive GDP growth in the lower range of 0.5% to 1.5%. The outlook for 2024 is more promising, with expectations for improved growth among trading partners as inflation eases and the electronics cycle begins to recover.

As Singapore navigates these economic challenges, the government and businesses will need to closely monitor global trends and adjust strategies to mitigate the impacts of declining exports and manufacturing output.