Singapore’s October exports slump, raising recession risks

Economy heavily dependent on trade with the developed world sees non-oil domestic exports plunge 12 per cent

PUBLISHED : Thursday, 17 November, 2016, 5:45pm
UPDATED : Thursday, 17 November, 2016, 10:18pm

Singapore’s exports shrank more than expected in October as sales to major markets fell, with those to Europe contracting sharply, raising risks of a recession in the trade-dependent economy.

Non-oil domestic exports skidded 12.0 per cent last month from a year earlier, the trade agency International Enterprise Singapore said on Thursday, far worse than the median forecast of a 3.5 per cent decline in a Reuters poll.

In September, overseas shipments slumped a revised 5.0 per cent on-year though the decline in sales to China slowed.

On a month-on-month, seasonally adjusted basis, exports decreased 3.7 per cent in October, missing a forecast of a 1.0 per cent slide in the survey.

Exports to the European Union contracted 28.6 per cent last month from a year earlier, compared with 9.9 per cent growth in September.

Contraction in sales of pharmaceuticals, non-electric engines and motors, as well as personal computers led the decline in October.

The downturn in sales to Europe came as those to China fell at a slower pace, though weak October trade data from the world’s second-biggest economy indicated global demand remained sluggish at best.

Shipments to China, Singapore’s top overseas market, were down 0.1 per cent in October from a year earlier, compared with a 2.2 per cent slump in September.

Singapore’s economy has been hit hard in the past two years as exports fell off due to slow global growth, while the key financial services industry has also suffered recently, raising the risk of a recession. The economy unexpectedly contracted in the third quarter, and has showed few signs of a steady recovery in the past month or so.

Activity at Singapore’s factories moderated in October, though an index for the key electronics sector hit a two-year high thanks to new orders and exports, a private survey showed earlier this month.

Exports to the United States shrank 3.7 per cent in October compared to the same month of 2015, after contracting 7.4 per cent in September.

By product, volatile pharmaceutical’s overseas sales decreased 47.0 per cent in October after growing 16.2 per cent in the previous month.

Total electronics exports last month fell 6.0 per cent from a year earlier, compared with a 6.6 per cent contraction in September.