SINGAPORE — Singapore exports shrank more than expected in August, highlighting
fears that a slowing Chinese economy and lackluster European demand will remain
a drag on Asian economies.
The city-state's weakness follows
sluggish trade data from China, South Korea and Taiwan, bolstering the picture
that even the more robust regions of the global economy aren't immune from the
slump in the big Western countries.
Singapore nonoil exports fell a
seasonally adjusted 9.1% from July, accelerating that month's 3.6% decline,
trade promotion agency International Enterprise Singapore said Monday. That was
much worse than the 0.7% decline forecast in a Dow Jones Newswires survey. From
a year earlier, exports sank 10.6% from a year, far steeper than the forecast
decline of 3.0% and reversing July's 5.7% rise.
Shipments of electronics, a mainstay
for the region's export machine, led the decline, falling 11% on year and
reversing a modest July rise. This comes as slow growth in the U.S., a likely
tumble by the euro zone into recession and a sharp slowdown in China have
damped demand for computer parts and other goods. August is usually a good
month for Singapore's electronics exports due to seasonal buying.
"The takeaway here is that
the tech sector hasn't improved," said Alastair Chan, an economist at
Moody's Analytics. "It doesn't bode well for Taiwan, South Korea and other
makers of electronics. I would think we are heading into a weak Christmas
season."
Singapore's export drop has
"dramatically increased" the chance that the economy, which
contracted in the three months through June, will slide into recession this
quarter, said Credit Suisse Economist Michael Wan.
That puts more pressure on the
central bank to ease policy next month. The Monetary Authority of Singapore,
which uses the exchange rate rather than interest rates as its policy tool for
the small, trade-reliant economy, is increasingly expected to relax its bias
toward steady appreciation of the Singapore dollar at its October policy
meeting.
Shipments of nonelectronics
products sank 10.4% on year, compared with a 7.8% rise in July.
An 87% decline in the marine
sector dragged the sector overall, although this mostly reflected a statistical
payback for large orders to Europe a year earlier. "Given the full order
books of (Singapore-based rig-builders) Keppel and Sembcorp Marine, we would
expect a boost in the coming months" to exports of marine equipment,
Barclays Economist Wai Ho Leong said in a research note.
Shipments to the European Union
lagged the most, falling 28.7% in August in nominal terms after a 1.5% decline
in July. Exports to China fell 4.4% after growing 8.0% the previous month.
Exports to the U.S. grew by 0.7%,
far too little to offset the large drop in shipments to Europe, while exports
to Taiwan and South Korea continued to register strong growth.
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