Singapore reported a surprise drop in non-oil domestic exports in September on Wednesday,disappointing economists who had expected a slight recovery after a strong performance by Taiwanese exporters last month.
The Southeast Asian city-state,whose trade is three times the size of its economy,said non-oil domestic exports fell 3.4 per cent in September from a year earlier,hurt by a 16.4 per cent drop in electronic shipments.
Economists polled had expected exports to rise 1.4 per cent year-on-year.
Singapore’s exports rose a slight 1.6 per cent from August after seasonal adjustments.
Singapore’s export blues could push Singapore into a technical recession in the fourth quarter,said Song Seng Wun,a regional economist at CIMB.
Singapore narrowly escaped going into recession in the third quarter as a 1.5 per cent contraction in the July-September period was offset by revised second-quarter data showing meagre growth of 0.2 per cent on a seasonally adjusted and annualised basis.
Song and other economists said the weakness in electronics shipments was quite surprising given the 10.4 per cent growth in exports reported by Taiwan last week after six straight months of decline.
I suppose Singapore is not plugged into the whole iPhone value chain like Taiwan and to a certain extent Korea,said Joey Chew,an economist at Barclays in Singapore.
She noted Singapore’s exports of integrated circuits fell by a much sharper 22.4 per cent year-on-year in September,compared with a decline of 2.1 per cent in August.
Barclays said in a note last week that demand for consumer technology products is set to improve in the fourth quarter,helped by the launch of Apple’s iPhone 5 and other smartphones and tablet PCs equipped with the new Windows 8 operating system.
Selena Ling,head of treasury research at Oversea-Chinese Banking Corp said the weak September trade numbers suggest there could be potential downward revisions to third-quarter gross domestic product when the government releases more detailed estimates next month.
Last week,the government stuck to its forecast for economic growth of 1.5 to 2.5 per cent this year,despite the larger-than-expected contraction in the third quarter.
Exports in September to the European Union,Singapore’s largest market,fell 15.7 per cent from a year earlier. Shipments to the United States,its third-biggest market,fell 7.2 per cent.
Exports to China,Singapore’s No.2 market,rose 1.8 per cent in September after a 4.5 per cent year-on-year contraction in August.