Going forward, Singapore’s non-oil domestic exports may remain somewhat volatile amid the various external headwinds – in particular, US sectoral tariffs on semiconductors which were earlier threatened but have not been implemented yet.

Selena Ling
Head, Global Markets Research & Strategy
OCBC

Singapore’s Non-Oil Domestic Exports (NODX) extended its declines, falling 11.3% Year-on-Year (YoY) in August after a 4.7% contraction in July.

This marked the largest YoY contraction since March 2024 (-20.8% YoY). The underperformance was largely due to the drag from non-electronics which contracted 13.0% YoY following a 6.7% decline previously, weighed down by specialised machinery (-29.1%), food preparations (-51.4%) and petrochemicals (-23.2%) due to a high base a year ago.

In absolute levels, August NODX of $13.3 billion is the lowest since February 2024 (Chinese New Year period). This phenomenon is not unique to Singapore as Japan’s exports also declined for the fourth consecutive month in August, dragged down by a 13.8% drop in shipment value to the US, which was the largest in more than four years, as the trade shock from US tariffs hit.

Electronics exports also slumped 6.5% YoY in August due to a high base last year, following a revised 2.7% YoY expansion in July. Notably, disk media (-28.1% YoY), ICs (-7.4%), and PC parts (-39.6%) were the key drags for electronics exports. On the global stage, recent news flow indicated that China has launched anti-dumping investigations on some US chips and ruled that Nvidia has violated some anti-monopoly laws after a 2020 acquisition. This comes amid the ongoing US-China trade talks and ahead of the expiry of the 90-day trade truce extension in early November. This is a damp quid on the broader AI growth narrative. That said, interestingly, South Korea’s 10-day export data for September rebounded 3.8% YoY (Aug: -4.3%) and its August exports also rose 1.3% YoY driven by semiconductor exports (+27%), which suggests that US tariffs had not derailed the demand for high-performance chips used for AI.

NODX to 7 of the top 10 NODX markets shrank in August, led by Indonesia (which contracted for the third straight month by 39.6% YoY due to non-monetary gold, petrochemicals and electrical machinery), US (which shrank for the 4th consecutive month by 28.8% due to weakness in food preparations, specialised machinery and disk media products), China (which fell for the second month by 21.5%), Hong Kong (-20.9%), Thailand (-20.0%), as well as Malaysia (-9.3%) and Japan (-2.3%). NODX only grew for EU (28.9% which was the second month of double-digit YoY growth), South Korea (which expanded strongly for the third straight month by a double-digit growth rate of 24.8% YoY) and Taiwan (up 9.1% which was still a sharp moderation from July’s 62.8%). Note that NODX to the US in absolute terms is the lowest since August 2019 (pre-pandemic), so beyond fading of frontloading effects, the US growth slowdown in 2H25 is also a likely contributing factor too, as illustrated by the recent softening US labour market conditions and the fact that both electronics and non-electronics exports from Singapore to the US were equally weak in August. NODX to China in absolute terms was also the lowest since February 2025, with similar broad-based weakness in electronics and non-electronics, but notably weighed down by specialised machinery, non-monetary gold and ICs – this is also an indication of the challenging conditions faced by the Chinese economy with soft domestic demand.

For the first eight months of 2025, NODX grew by a modest 1.6% YoY, which is still an improvement from the 0.6% YoY contraction for the same period last year. For 3Q25, NODX is likely to shrink 6.0% YoY but see some stabilisation and the possibility of a marginally positive YoY growth in 4Q25, partly due to a more conducive base effects (3Q24: 9.0% YoY and 4Q24: 2.4% YoY). For the full-year 2025, NODX is likely to come in at the lower end of EnterpriseSG’s 1-3% YoY forecast and EnterpriseSG has said it is actively monitoring the evolving tariff situation and will adjust its forecast as necessary to reflect the changing market conditions. Our existing NODX forecast is 2% YoY, but the bigger-than-expected bout of recent NODX weakness may imply some downside risk of about 1% YoY since the US tariff and global growth slowdown story is still changing dynamically. This is the anticipated “payback” in 2H25 that we have been warning about, after the earlier frontloading effects that saw NODX surge 5.2% (1H24: -4.9% YoY) as exporters rushed to get ahead of the expected US tariff implementation.

At this juncture, it is still unclear if FOMC rate cuts will be sufficient to ward off the downside growth risks for the US economy, although a US recession is not our base case in 2025 even if a 2H25 moderation is on the cards. Going forward, Singapore’s NODX may remain somewhat volatile amid the various external headwinds – in particular, US sectoral tariffs on semiconductors which were earlier threatened but have not been implemented yet. So, there could be more shockwaves ahead if they materialise, and the same for pharmaceutical tariffs.