Singapore’s exports decline on slumping sales to U.S., Europe

August 18, 2008
Singapore Democrats

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Shamim Adam
Bloomberg

Singapore’s overseas shipments fell for a third month in July as companies shipped fewer electronics and drugs to customers in the U.S. and Europe.

Non-oil domestic exports slid 5.7 percent from a year earlier, after declining a revised 10.6 percent in June, the government’s trade promotion agency said in a statement today. Economists had expected a 5 percent drop.

Singapore this month cut its forecasts for 2008 economic growth and exports, joining its Asian neighbors in signaling a deeper slowdown as a housing recession and financial turmoil slow expansion in the U.S. Demand for the region’s manufactured goods may ease further as growth also slows in economies including Japan, where overseas sales fell in June.

“The global outlook is looking darker with Japan and Europe probably slipping into recession, and the U.S. still sputtering,” said David Cohen, an economist at Action Economics in Singapore. “It doesn’t bode well for demand for Singapore’s exports.”

Exports fell a seasonally adjusted 2.2 percent last month from June, when they climbed 4.2 percent, today’s report showed. Economists had expected a 3.4 percent gain.

The island’s trade promotion agency last week said it now expects exports to drop as much as 4 percent this year, from an earlier estimate of growth of 2 percent to 4 percent. Shipments grew 2.3 percent in 2007.

Electronics fall

Electronics shipments slipped 14.2 percent in July from a year earlier, the 18th consecutive drop, following a revised 14.7 percent decline in June. Sales of electronics products were worth S$5.2 billion ($3.7 billion) last month compared with S$4.8 billion in June.

Singapore’s semiconductor shipments dropped 7.7 percent from a year earlier after falling 24.5 percent in June. Disk- drive exports declined 25.1 percent in July.

Non-electronics shipments, which include petrochemicals and pharmaceuticals, rose 0.3 percent in July from a year earlier. Petrochemical exports climbed 26.5 percent.

Pharmaceutical shipments dropped 42.4 percent last month from a year earlier, after sliding 22.3 percent in June. Drug shipments were valued at S$1.07 billion in July, compared with S$1.51 billion the month before.

Singapore’s drug exports tend to fluctuate from month to month because of swings in production as companies shut plants for cleaning before making different chemicals. Some pharmaceuticals require several ingredients to be made and mixed before they are ready for export.

Sales to the European Union, Singapore’s largest overseas market, fell 26.9 percent in July. Shipments to the U.S., its second-biggest market, dropped 33.1 percent, while exports to China increased 8.6 percent last month.

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