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Weak demand from the United States and Europe sent Singapore’s exports falling for the 18th consecutive month in October, the government said Tuesday.
Non-oil domestic exports, a closely watched barometer of the health of the trade-dependent economy, declined 6.1 percent in October from the same month last year, the trade promotion body International Enterprise (IE) Singapore said.
The drop was worse than the 0.6 percent fall tipped in a Dow Jones Newswires poll of analysts, but was narrower than the revised 7.3 percent contraction in September.
IE Singapore said the decrease was due largely due to subdued demand from the United States and the European Union — key export markets hammered by the recent global economic downturn.
Exports to the United States fell 11 percent, worse than the 4.7 percent drop in September. Shipments of electronics products declined by 30 percent as demand for computer chips and disk drives tumbled.
Shipments to the EU were down 22 percent in October, compared with the 15 percent shrinkage the previous month. Electronics exports to the EU shrank 36 percent.
Chips, disk drives and other components that go into personal computers, mobile phones and other high-tech consumer gadgets are vital Singapore exports.
American consumers however have been spending less after the world’s biggest economy fell into its worst economic crisis since the 1930s.
While the US economy has clawed its way out of recession, unemployment levels remain high, shooting up to 10.2 percent in October.
The European Commission has also said it expected the eurozone economy to expand rather than contract in 2010, but warned that rising unemployment and public deficits would remain problems for several years.
Singapore’s economy is expected to contract 2.0-2.5 percent this year, smaller than the previous estimate of 4.0-6.0 percent shrinkage.
Although growth is seen to return next year, officials have cautioned that this will remain fragile until a more durable global economic recovery has been achieved.
Singapore October exports decline unexpectedly
Singapore’s exports declined in October on lower electronic and non-electronic shipments, defying expectations for a gain, a report from the International Enterprise Singapore showed on Tuesday.
Non-oil domestic exports dropped 6.1% year-on-year in October, slower than a revised 7.3% decrease in the previous month. Exports in September were downwardly revised from the 7.2% drop estimated initially. Economists expected an increase of 0.2%. NODX declined for the 18th straight month.
“On a yearly basis, NODX data for the next few months, particularly in December and January, are going to look especially encouraging,” economists at DBS Bank said in a note. “But the underlying story is that the strong V-shaped recovery in Asia is likely to give way to a more gradual pace of growth, which should be manifested in key economic data in sequential terms.”
Electronic NODX slid 14% annually in October, matching September’s decline. Economists were looking for a decline of 11.7%. The agency noted that the decrease in electronic domestic exports was largely due to lower domestic exports of integrated chips and disk drives.
Economists at ING Bank expect electronics to remain biggest contributor post-Lehman bounce in US dollar-value NODX. They noted that electronics contributed 15 percentage points to the 37% NODX bounce from January-February to September.