Singapore key exports surge 22% in October amid booming AI demand; economists raise forecasts

(Photo credit: ST File)

Source: The Straits Times

Singapore’s key exports accelerated much more than expected in October amid booming global demand for chips and artificial intelligence (AI) technology.

Following the outperformance, economists raised their full-year export forecasts while acknowledging the Republic still faces the risk of US President Donald Trump imposing tariffs on now-exempt semiconductors going into 2026.

They also noted that demand from other Asian countries is more than offsetting declines from the United States.

Non-oil domestic exports (Nodx) expanded 22.2 per cent from a year ago, after a revised 7 per cent expansion in September, data from Enterprise Singapore on Nov 17 showed.

The figure is well above the 7.5 per cent rise forecast by economists in a Bloomberg poll.

UOB associate economist Jester Koh noted that Singapore’s Nodx has risen 4.1 per cent year to date, putting it on track to surpass the official full-year estimate of 1 per cent to 3 per cent growth.

He added that the Government may raise its estimate on Nov 21 in tandem with the release of the final third-quarter gross domestic product (GDP) reading. UOB tips GDP to have grown 4 per cent year on year in the July to September quarter, higher than the 2.9 per cent official advance estimate.

OCBC Bank chief economist Selena Ling said the bank upgraded its full-year Nodx growth forecast to 4 per cent. “If our 4 per cent Nodx growth forecast materialises, this is a huge improvement from 0.2 per cent growth in 2024 and would mark the fastest pace since 2021 (12.1 per cent),” she said.

Its 2026 Nodx growth forecast remains at 1 per cent to 3 per cent, given the high base in 2025.

Adding that the Nodx base turns slightly more challenging for November to December due to an uptick registered in the same period a year earlier, Ms Ling said the bank tipped Nodx to grow by 3.3 per cent in the last two months of 2025.

RHB also hiked its full-year Nodx growth forecast – from 2 per cent to 4 per cent – with “potential upward bias to our full-year GDP forecast of 3 per cent in 2025”.

Oxford Economics said Asian exports are poised to outperform exports from other regions in the upcoming quarters, partly reflecting a structural shift in AI-linked electronics demand.

Its senior economist Sheana Yue said: “Concurrently, Asian supply chains are reorganising amid China’s export transition. For Singapore, this suggests increased re-export volume through the city-state.”

Assuming no further escalation in US tariffs, Ms Yue expects Singapore’s export volumes to rise 6.4 per cent in 2025, up from the firm’s earlier forecast of 5.3 per cent. Oxford Economics also raised its 2026 forecast to 1.1 per cent from a contraction of 0.4 per cent.

For October, shipments of electronic products surged 33.2 per cent, extending the 30.4 per cent rise in the previous month, as they continued to benefit from US exemptions on electronics goods and relentless AI-related demand.

Growth was driven by a 77.7 per cent surge in personal computer exports. Shipments grew 31.4 per cent for disk media products and 40.9 per cent for integrated circuits (ICs), or chips.

Mr Koh of UOB noted that there may have been some front-loading of exports as a hedge against potential US semiconductor tariffs.

Non-electronics shipments, of which pharmaceuticals are a big part, expanded 18.8 per cent year on year in October, following the 0.5 per cent increase in the previous month.

The growth was led by a 176.8 per cent jump in non-monetary gold exports, a 25.2 per cent increase for pharmaceuticals, and a 16.1 per cent rise for specialised machinery.

In terms of markets, DBS senior economist Chua Han Teng noted that while shipments to the US shrank for the sixth straight month, it was more than offset by sustained strength to other top destinations.

“This demonstrated some signs of near-term resilience by global supply chains in adjusting to the evolving US tariff situation,” he said.

Exports to Taiwan expanded 61.5 per cent, extending the 31.9 per cent rise in September, because of a 119.8 per cent jump in specialised machinery exports, a 30.7 per cent rise in ICs, and a 289.1 per cent jump in disk media products.

Shipments to Thailand soared 91.1 per cent in October, after the 23.9 per cent growth the previous month, as non-monetary gold exports jumped 844.6 per cent, while exports of ICs increased 73.9 per cent and bare printed circuit boards were up 71.3 per cent.

Nodx to Hong Kong expanded 66.9 per cent in October, after the 56.3 per cent rise in September, on the back of a 93.3 per cent growth in shipments of ICs, while specialised machinery exports jumped 848.1 per cent and those of non-monetary gold were up 68.9 per cent.

Key exports to the US, Singapore’s single largest export market, declined 12.5 per cent, while those to Japan dropped 0.1 per cent.

RHB said the sharp pickup in orders from Asean, with exports to Indonesia, Malaysia, Thailand, Hong Kong, South Korea, Taiwan and the EU posting double-digit gains, more than compensated for ongoing softness in shipments to major developed markets such as the US, Japan and China.