He notes in his Sept 17 note that Singapore’s NODX performance “significantly” came below both Bloomberg’s consensus forecast of an 0.8% marginal y-o-y growth and Koh’s more cautious projection of 2.5% lower yo-y.
While electronics NODX declined 6.5% y-o-y, Koh notes that this was “largely” due to unfavourable base effects. The main drag on headline NODX he writes, came from the non-electronics segment, which fell 13.0% y-o-y, followed by specialised machinery at 29.1% y-o-y, food preparations at 51.4% and lastly, petrochemicals at 23.2% y-o-y, which contributed the most to the decline.
“The Aug NODX outcome reaffirms the outperformance in electronics vs nonelectronics in the recent months, likely reflecting tailwinds from AI-related demand as highlighted in our August purchasing manager’s index (PMI) note and 4Q2025 quarterly report,” writes Koh.
Unpacking the electronics NODX decline, the UOB economist notes this was driven by weakness in consumer electronics and telecommunications equipment, while high base effects weighed on integrated circuits and printed circuit boards (PCB) assembly.
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On a geographical basis, Koh notes that August’s data points to a gradually weakening external environment.
He writes: “NODX to China contracted sharply by 21.5% y-o-y, consistent with China’s August activity data where retail sales and fixed asset investments were downbeat; NODX to several Asean economies slumped in Aug despite relatively favourable base effects compared to July while NODX to the US recorded a smaller contraction of 28.8% y-o-y due to base effects.”
With this, Koh notes that signs of a slowdown in monthly trade-related activity indicators are emerging in the month based on non-oil re-exports (NORX) and sea cargo handled, with scope for activity to “weaken further” due to payback effects from the earlier front-loading.
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The team at OCBC Market Research (OCBC) led by economist Selena Ling expects NODX to shrink 6.0% y-o-y in the 3Q2025, but see “some stabilisation” and maybe even marginally positive y-o-y growth in the 4Q2025, partly due to a more conducive base effects.
She writes: “For the full-year 2025, NODX is likely to come in at the lower end of EnterpriseSG’s 1% to 3% y-o-y 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.”
While Ling retains her existing NODX forecast of 2% y-o-y, she adds that the “bigger-than-expected” bout of recent NODX weakness “may imply” some downside risk to about 1% y-o-y, due to the US tariff and global growth slowdown.
She writes: “This is the anticipated ‘payback’ in 2H2025 that we have been warning about, after the earlier frontloading effects that saw NODX surge 5.2% as exporters rushed to get ahead of the expected US tariff implementation.”
“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 ditto for pharmaceutical tariffs,” adds the OCBC economist..
In absolute levels, Ling notes that the August NODX of $13.3 billion is the lowest since February 2024.
This “phenomenon”, she writes, “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 following trade shock from the US tariffs.
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On Singapore’s electronics NODX, she sees China’s anti-dumping investigations on US chips amid ongoing US-China trade talks and ahead of the expiry of the 90-day trade truce extension in early November to be “a damp quid” on the broader artificial intelligence (AI) growth narrative.
Overall, she says that NODX to 7 of the top 10 NODX markets shrank in August, with NODX to the US in absolute terms the lowest since August 2019, while NODX to China in absolute terms was also the lowest since February 2025.
Senior economist at DBS Bank, Chua Han Teng agrees with his peers:”Singapore’s exports profile in the first two months of 2H2025 has weakened compared to the resilience in 1H2025, and in our view, will continue to face challenges and be volatile amid an uncertain global trade landscape.”
“The city-state’s external demand will likely encounter headwinds due to still-high US tariffs globally, with higher US reciprocal tariffs (compared to during the 90-day pause) already effective since August,” adds Chua.
Meanwhile, Oxford Economics’ Shena Yue notes that while August data was weaker than expected, it could “reflect reversion” following July's surge, thus suggesting a “possible” upside in September.
“The July and August trade data support our forecast that Singapore's gross domestic product (GDP) is set to contract in seasonally adjusted q-o-q terms in 3Q2025,” writes Yue.
She adds: “More broadly, any remaining resilience is set to diminish. Singapore's open and trade reliant economy makes it susceptible to indirect effects from higher tariffs elsewhere.”
On a more positive note, Yue sees that the hit from tariff hikes is likely to be “felt gradually”, mainly due to lags in implementation and compliance issues of higher tariffs by the US Customs. Additionally, a structural shift in AI-linked electronics demand could lift electronics production and exports, softening the blow to export growth.
Perhaps the most bullish out of the economists is Maybank Securities’ (Maybank) Chua Hak Bin and Brian Lee Shun Rong.
“We reiterate our GDP growth forecast of 3.2% y-o-y in 2025 and 2% y-o-y in 2026. The August decline in NODX comes on the back of higher US reciprocal tariffs for the region, which kicked in on Aug 7. Despite exports losing some momentum, other indicators suggest that a sharp and extended trade downturn remains unlikely,” write the pair.
Chua and Lee note that Singapore’s August manufacturing PMI showed a faster expansion in the electronics sub-gauge, with the new electronics export orders index rising to a 5-month high. “The overall manufacturing PMI also ticked up to 50 with new export orders improving,” they add.
With the backdrop of broadening AI demand, Chua and Lee see electronics NODX to “likely resume” growth in September as the high base effects “dissipate”.
They add: “Another reason to stay optimistic on exports and manufacturing is Singapore and the rest of Asean’s relative tariff advantage, which will support regional trade volumes. Falling interest rates, a construction boom and generous fiscal support will also help cushion the blow from the trade slowdown.”
Meanwhile, Chua and Lee note that other non-trade related indicators, including financial activities and property transactions, “remain robust” and suggest a resilient GDP growth in the 3Q2025.
“Monetary conditions are easing as interest rates fall rapidly. The 3-month Singapore overnight rate average (SORA) rate has fallen about 156 basis points (bps) year-to-date, hitting a low of 1.51% today,” write Maybank’s economists.
They have revised their 3-month SORA forecast to 1.3% by the year-end and 0.9% by the end-2026, amid continued safe haven inflows and impending US Federal Reserve rate cuts.
“We expect the Monetary Authority of Singapore (MAS) to maintain the current modest appreciation bias at the upcoming October meeting and for the rest of this year, given the resilient economic outlook,” conclude Chua and Lee.
