NODX to stay positive in 2021: analysts

Analysts expect the full-year non-oil domestic exports to grow by 1%-2% in 2021.

Non-oil domestic exports (NODX) expanded by 4.2% in February month-on-month, keeping 2021 on upward trajectory.

On a year-on-year basis, electronic NODX grew by 7.4%, driven by the demand for PCs, telecommunication equipment, and diode and transistors. Non-electronics grew by 3.3%, driven largely by gold.

"Non-monetary gold was the biggest support. Stripping out the gold factor, NODX would have declined 1% YOY," said HSBC in a statement, noting that most developed markets fell due to imports of pharmaceutical products. On the other hand, it expects electronics to continue on an upswing.

"In addition, recovery in petrochemical shipments continued to be sustained on the back of higher oil prices. This bodes well with our conviction that Singapore's trade should remain resilient in 2021," HSBC added, retaining its 6.5% GDP forecast for the full year of 2021.

OCBC, on the other hand, forecasts a 2% NODX growth, expecting a volatile first half of the year to be stablised in the next six months.

"Given the rising optimism about a vaccine-aided global recovery, with the Biden administration’s latest $1.9t fiscal stimulus being icing on the cake for the US economy coupled with signs of a robust recovery in China, hopes are growing that the 2H21 recovery will be on a more stable footing, notwithstanding the base illusion effects which will result in very volatile 1H21 economic data prints," OCBC said.

UOB forecasts a slightly lower full-year NODX at 1%, led by exports of telecommunciations equipment, PCs, and consumer electronics, with a possible expansion in petrochemical exports due to higher oil prices. But it flagged COVID-19 as a continued volatile risk.

"Notwithstanding the sanguinity, there are still pronounced uncertainties regarding how COVID-19 may evolve, which may derail the optimism felt to-date," UOB said.

Moody's Analytics noted that whilst demand for semiconductors will increase due to the rapid adoption of remote working, 5G, Internet of Things and electronic vehicles, supply might be dampened by logistic bottlenecks.

"Supply and logistics bottlenecks is expected to dampen the export outlook for the coming quarters, including the congestion at ports and chip shortages. Singapore's pace of manufacturing will ease in the second half given tighter supply capacity limits and as the high-base effects for electronics come into play. Growth could also be hampered in the near-term as some companies are still not running at full capacity due to social distancing measures for workers," Moody's Analytics said.