Singapore's NODX Surge Signals Front-loading Ahead of US Tariffs

Singapore's non-oil domestic exports (NODX) and non-oil re-exports (NORX) data for December 2024 indicate a significant surge in shipments, with exporters front-loading their shipments in anticipation of proposed tariffs on US imports under a second Trump administration. According to the United Overseas Bank (UOB), NODX rose by 1.7% month-on-month (MoM) seasonally adjusted (sa) in December, following a robust 14.7% MoM sa increase in November. NORX grew by 4.8% MoM sa in December, building on an 8.8% rise in November.



The impact of front-loading is particularly evident in the electronics segment, with electronics NORX surging by 30.3% year-on-year (YoY) in December, compared to a 12.7% YoY increase in November. UOB noted that this sharp acceleration suggests that exporters are ramping up shipments to the US to circumvent potential cost increases that could arise from tariff hikes. Despite the resilience of Singapore's electronics exports, there are signs that the growth cycle may soon peak.

Looking ahead to 2025, UOB projects NODX growth at 1.5%, an improvement from the modest 0.2% growth in 2024. However, the pace of growth is expected to slow in the 2H25 due to the anticipated impact of tariffs. This forecast aligns with the official projection range of +1.0% to +3.0%, as outlined in the 3Q24 Trade Performance report by Enterprise Singapore.

The potential for increased tariffs is top of mind for many executives, and understanding various tariff scenarios can position leaders to seize opportunities in the coming years. By front-loading shipments, companies can mitigate the immediate impact of tariffs on their operations and profitability. However, it is essential to consider the long-term implications and potential risks associated with this strategy, such as port congestion, warehouse capacity constraints, and cash flow strain.

In conclusion, the surge in Singapore's NODX and NORX data signals that exporters are proactively front-loading shipments in anticipation of proposed US tariffs. While this strategy can provide short-term relief, companies must carefully evaluate the risks and consider alternative strategies to mitigate the impact of tariffs on their supply chains and operations.