Review of 2009 Trade Performance And Revised Outlook For 2010
MR No.: 009/10 Highlights
Singapore’s total trade declined by 19 per cent to $747 billion in 2009. The decrease was due to contractions in both oil and non-oil trade which declined by 31 and 15 per cent respectively.
NODX decreased by 11 per cent in 2009 after a 7.9 per cent contraction in the previous year. The decline was due to lower electronic and non-electronic NODX.
With the exception of Hong Kong and Taiwan, NODX to Singapore’s top 10 markets contracted in 2009. The three markets which made the highest contributions to the NODX decline were the US, the EU-27 and Malaysia.
NORX decreased by 16 per cent, after increasing by 2.0 per cent in 2008, on slower growth of both electronic and non-electronic NORX.
In 2010, total trade is projected to increase between 9.0 and 11.0 per cent, up from the previous forecast of 7.0 and 9.0 per cent, while NODX is expected to grow by between 10 and 12 per cent.
TOTAL TRADE
1.
Singapore’s external trade declined by 19 per cent in 2009 after a 9.6 per cent growth in the preceding year. The level of total trade reached $747 billion in 2009, down from $928 billion in the previous year. The contraction in external trade can be attributed to lower exports and imports, which decreased by 18 per cent and 21 per cent respectively in 2009.
2.
The decline in external trade was due to lower oil and non-oil trade. Oil trade contracted by 31 per cent in 2009 after the previous year’s expansion of 50 per cent. Non-oil trade decreased by 15 per cent in 2009, following a flat growth in 2008.
NON-OIL DOMESTIC EXPORTS
3.
Non-oil domestic exports (NODX) contracted by 11 per cent in 2009 after a 7.9 per cent decrease in 2008, due to lower electronic and non-electronic NODX.
4.
Electronic NODX contracted by 18 per cent in 2009, following a decrease of 12 per cent in the previous year. The decline in electronic NODX can be attributed to lower sales of parts of PCs, parts of ICs and ICs. Non-electronic NODX also contracted by 5.7 per cent in 2009, after the previous year’s decrease of 5.2 per cent. The decline in non-electronic NODX in 2009 was mainly because of lower domestic exports of petrochemicals, heating & cooling equipment and other specialty chemicals.
5.
NODX to all the top 10 markets contracted in 2009, with the exception of Hong Kong and Taiwan. The main contributors to the NODX decrease in the year were the US (-24 per cent), the EU-27 (-15 per cent) and Malaysia (-16 per cent).
PRODUCTS
6.
Electronic products. Domestic exports of electronic products (comprising 37 per cent of NODX) contracted by 18 per cent in 2009, following a decline of 12 per cent in 2008. The decline in electronic NODX can be attributed mainly to lower domestic exports of parts of PCs (-18 per cent), parts of ICs (-30 per cent) and ICs (-8.7 per cent).
7.
Non-electronic products. Non-electronic NODX (comprising 63 per cent of NODX) contracted by 5.7 per cent in 2009 after a decline of 5.2 per cent in 2008. The decrease in non-electronic NODX can be attributed to lower domestic exports of petrochemicals (-24 per cent), heating & cooling equipment (-46 per cent) and other specialty chemicals (-21 per cent).
MARKETS
8.
Top 10 markets. NODX to the top 10 markets declined in 2009, with the exception of Hong Kong and Taiwan. In particular, the markets that made the highest contributions to the NODX decrease in 2009 were the US, the EU-27 and Malaysia
9.
NODX to the EU-27 contracted by 15 per cent in 2009, following a decrease of 19 per cent in 2008, with lower electronic and non-electronic domestic exports. Electronic NODX to the EU-27 declined by 32 per cent, following the 4.8 per cent decrease in 2008. The contraction of electronic domestic exports to the EU-27 was led by lower sales of ICs (-40 per cent), parts of PCs (-38 per cent) and disk drives (-22 per cent). Non-electronic NODX to the EU-27 declined by 5.0 per cent in 2009, following a contraction of 25 per cent in the preceding year, largely driven by decreased shipments of petrochemicals (-60 per cent), household goods (-41 per cent) and printed matter (-34 per cent).
10.
NODX to the US decreased by 24 per cent in 2009 after a 23 per cent contraction in 2008 due to declines in both electronic and non-electronic goods. Electronic NODX to the US declined by 30 per cent in 2009, following a decrease of 19 per cent in 2008. Lower sales of ICs (-32 per cent), disk drives (-32 per cent) and telecommunications equipment (-57 per cent) contributed to the decrease. Non-electronic NODX to the US declined by 15 per cent in 2009 after a decrease of 28 per cent in 2008. This decrease was due to declines in demand for pharmaceuticals (-10 per cent), measuring instruments (-22 per cent) and electrical circuit apparatus (-28 per cent).
11.
NODX to China contracted by 7.7 per cent, following the previous year’s decline of 2.3 per cent due to lower shipments of both electronic and non-electronic NODX. Electronic NODX to China decreased by 21 percent after a 6.3 per cent decline in 2008. The contraction in electronic NODX to China was mainly due to lower domestic exports of parts of PCs (-36 per cent), ICs (-7.6 per cent) and disk drives (-20 per cent). Non-electronic NODX to China contracted by 1.0 per cent in 2009, following the previous year’s decline of 0.1 per cent, on decreases in heating & cooling equipment (-58 per cent), disk media products (-8.2 per cent) and plastic plates & sheets (-77 per cent).
12.
NODX to Malaysia declined by 16 per cent in 2009 after a decrease of 8.8 per cent in 2008 due to lower electronic and non-electronic domestic exports. Electronic NODX to Malaysia contracted by 11 per cent, following a decrease of 19 per cent in 2008 due to declines in domestic exports of parts of PCs (-17 per cent), parts of ICs (-32 per cent), and diodes & transistors (-42 per cent). Non-electronic NODX to Malaysia decreased by 19 per cent after growing by a marginal 0.8 per cent in 2008. The decline in non-electronic NODX to Malaysia was led by lower domestic exports of petrochemicals (-30 per cent), iron or steel scrap (-67 per cent) and civil engineering equipment parts (-26 per cent).
13.
NODX to Hong Kong increased by 4.7 per cent in 2009 after a flat growth in 2008, led by an expansion in electronic NODX which negated the fall in non-electronic NODX. Electronic NODX to Hong Kong increased by 12 per cent following a rise of 2.4 per cent in the preceding year. The increase in electronic domestic exports was led by higher sales of parts of PCs (+68 per cent), consumer electronics (+86 per cent), and diodes and transistors (+33 per cent). Non-electronic NODX to Hong Kong declined by 6.1 per cent after the preceding year’s decrease of 3.2 per cent in 2008, due to lower domestic exports of petrochemicals (-43 per cent), electrical power machinery (-74 per cent) and food preparations (-60 per cent).
14.
NODX to Indonesia contracted by 20 per cent in 2009 after a rise of 2.7 per cent in 2008 due to declines in both electronic and non-electronic NODX. Electronic NODX to Indonesia decreased by 20 per cent following the previous year’s contraction of 0.7 per cent, on lower domestic exports of parts of PCs (-40 per cent), consumer electronics (-37 per cent) and parts of ICs (-56 per cent). Similarly, non-electronic NODX to Indonesia declined by 20 per cent in 2009 after growing by 3.8 per cent in 2008, mainly attributed to lower sales of petrochemicals (-25 per cent), metal manufactures (-60 per cent) and electrical circuit apparatus (-25 per cent).
15.
NODX to Japan decreased by 20 per cent in 2009 following a marginal decline of 0.3 per cent in 2008, due to lower electronic and non-electronic NODX. Electronic domestic exports to Japan contracted by 23 per cent in 2009, following a 6.6 per cent decrease in 2008 due to lower sales of ICs (-13 per cent), parts of ICs (-43 per cent) and telecommunications equipment (-87 per cent). Non-electronic NODX to Japan declined by 18 per cent after the previous year’s rise of 5.0 per cent due to decreases in domestic exports of petrochemicals (-50 per cent), disk media products (-7.9 per cent) and metal waste scrap excluding iron (-57 per cent).
16.
NODX to all of the remaining key markets except Taiwan shrank in 2009. NODX to Thailand contracted by 20 per cent in 2009, following the decrease of 12 per cent in 2008 due to lower electronic and non-electronic NODX. Electronic and non-electronic NODX to Thailand declined by 29 per cent and 16 per cent respectively in 2009. NODX to South Korea decreased by 1.0 per cent after a contraction of 0.3 per cent in the preceding year, on a decline in electronic NODX which outweighed the rise in non-electronic NODX. In particular, electronic domestic exports decreased by 8.3 per cent in 2009, following the 11 per cent contraction in 2008. NODX to Taiwan rose by 7.9 per cent in 2009, after a contraction of 11 per cent in the preceding year on higher electronic domestic exports which outweighed the decrease in non-electronic domestic exports. Electronic domestic exports to Taiwan rose by 17 per cent in 2009 after a decline of 16 per cent in 2008, while non-electronic domestic exports posted a 2.5 per cent decline in 2009, following a contraction of 4.2 per cent in 2008.
OIL DOMESTIC EXPORTS
17.
Oil domestic exports decreased by 34 per cent in 2009, compared to the 41 per cent rise in 2008. The decline of oil domestic exports in 2009 was driven mainly by lower oil sales to Hong Kong, Australia and the EU 27. In volume terms, oil domestic exports declined by 1.5 per cent in 2009 after expanding by 8.5 per cent in 2008.
NON-OIL RE-EXPORTS
18.
Non-oil re-exports (NORX) decreased by 16 per cent in 2009 after a rise of 2.0 per cent in 2008 due to lower sales of electronic and non-electronic NORX. Electronic re-exports declined by 18 per cent in 2009, following a contraction of 2.5 per cent in 2008 on lower re-exports of ICs (-8.2 per cent), parts of PCs (-30 per cent) and telecommunications equipment (-35 per cent). Non-electronic NORX decreased by 12 per cent in 2009, after the previous year’s increase of 8.0 per cent, led by lower re-exports of piston engines (-28 per cent), primary chemicals (-45 per cent) and civil engineering equipment parts (-13 per cent).
19.
NORX to the top 10 markets contracted in 2009, except for Korea. In particular, the key markets with the largest declines were Malaysia, Indonesia and the EU-27. NORX to Malaysia decreased by 21 per cent following the previous year’s 8.2 per cent contraction on declines in both electronic and non-electronic NORX. NORX to Indonesia contracted by 22 per cent in 2009 after growing by 7.6 per cent in the preceding year due to lower shipments of electronic and non-electronic re-exports. NORX to the EU-27 decreased by 28 per cent in 2009 compared to the rise of 11 per cent in 2008 as a result of lower electronic and non-electronic re-exports.
OIL RE-EXPORTS
20.
Oil re-exports decreased by 24 per cent in 2009, after growing by 58 per cent in 2008. The decline in oil re-exports in 2009 was led by lower shipments of oil to Indonesia, Malaysia and Vietnam. In volume terms, growth of oil re-exports increased by 13 per cent in 2009, following the 26 per cent rise in 2008.
REVISED OUTLOOK FOR 2010
21.
Singapore’s 2009 total trade contraction of 19 per cent was better than our previously projected range of between -22.0 and -21.0 per cent due to a better than expected trade performance in the final quarter of 2009. The NODX decline of 10.6 per cent in 2009 was within our projected decrease of 11.0 to 10.0 per cent.
22.
Global recovery seems to be well under way with improvements seen in global production and trade especially over the last quarter of 2009. Going forward, the external environment is expected to improve in 2010 with the World Bank projecting global output to grow by 2.7 per cent in 2010, after a decline of 2.2 per cent in 2009. The growth is projected to be led by the emerging economies as most developed economies are likely to stay lacklustre. Oil trade growth is expected to be stronger as oil prices are likely to rise steadily in 2010. In addition, electronic exports will register stronger growth due to a recovery in global semiconductor sales. On the other hand, export growth is likely to be tempered by the slower growth of the advanced economies.
23.
Singapore’s total trade is projected to grow by between 9.0 and 11.0 per cent in 2010, up from the previous forecast of a 7.0 to 9.0 per cent rise. NODX is expected to increase by 10 to 12 per cent. The key factors underlying the revised trade outlook for 2010 are as follows:
a.
Recovery in world trade The World Bank expects the global trade volume of goods and services to register a positive growth of 4.3 per cent in 2010, after a fall of 14 per cent in 2009. The emerging economies are expected to lead the increase in global economic activity, boosted by their internal consumption, but with real GDP forecasts for 2010 projected to be significantly lower than their growth rates in 2008. In most advanced economies, growth in 2010 is expected to be weak and sluggish.
b.
Strong growth of Asian economies Asian economies were not seriously affected by the current economic slowdown with key Asian economies such as China and Hong Kong leading the global recovery. China is expected to also lead Asian’s growth in 2010 with a projected growth exceeding 9.0 per cent. The growth of the Asian economies will be a boon for Singapore’s export growth given that most of our exports are headed to Asian markets. The main concern of the Asian economies is a much slower than expected recovery of the industrialised markets, particularly the US since most of the region’s exports are still largely driven by final demand from the developed markets, particularly the US.
c.
Recovery in global electronic demand Global electronics demand is expected to improve in 2010, rising by around 12 per cent, according to forecasts of major semiconductor industry and IT analysts. The recovery in global electronics demand is likely to be driven by global demand for wireless, handheld and consumer electronic devices. The Asian region is expected to be the fastest growing geographical area for sales of semiconductors due to rising domestic demand from China and India. As a result of the electronics recovery, Singapore’s electronic NODX and NORX are expected to register stronger growth rates in 2010.
d.
Higher oil prices Oil prices are expected to maintain a steady growth in 2010. Oil prices are expected to be around US$75 to US$85 per barrel in 2010. Singapore’s oil trade is hence projected to increase in 2010 on higher oil prices.
24.
The main downside risks to the trade outlook for 2010 include a sluggish global recovery, slow recovery in household spending, especially in the US, and high commodity prices which may impede global growth.
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