Singapore's Exports Decline Most in More Than 6 Years

By Stephanie Phang

Nov. 17 (Bloomberg) -- Singapore's exports posted the biggest decline in more than six years in October as recession in Japan, Europe and the U.S. hurt demand for the island's electronics and drugs.

Non-oil domestic exports fell 15.3 percent from a year earlier, after contracting 5.7 percent in September, the trade promotion agency said in a statement today. Economists had expected an 8.2 percent drop. Total exports, including oil shipments and re-exports, fell 4.2 percent.

Singapore plans to bring forward its budget announcement, help small and medium-sized companies obtain financing and provide training for retrenched workers amid the global economic slowdown, Prime Minister Lee Hsien Loong said yesterday. The economy fell into its first recession since 2002 in the last quarter, prompting the central bank to end a policy favoring gains in its currency.

Worsening trade ``will put additional pressure on the Monetary Authority of Singapore to make an intra-meeting adjustment to its currency band,'' said Robert Prior-Wandesforde, an economist at HSBC Holdings Plc in Singapore. ``It also helps justify the government's decision to bring forward the budget to January, where companies, in particular, can look forward to a series of goodies.''

The Singapore dollar fell to as low as S$1.5256 today, the weakest level since September 2007.

Slow Growth

Singapore's recession will last about a year and it may take several years of slow growth before the economy returns to normal, the Straits Times cited Lee as saying in a report today. The government expects overseas shipments to decline as much as 4 percent this year, the worst performance since 2001.

Exports dropped a seasonally adjusted 7.4 percent last month from September, when they fell a revised 0.9 percent, today's report showed. Economists had expected a 0.5 percent decline.

``Electronics exports have been contracting for about two years and the pace of decline has in fact worsened in recent months,'' said Irvin Seah, an economist at DBS Group Holdings Ltd. in Singapore. ``Given the current global economic conditions, the outlook for this sector in Singapore is exceptionally bleak going forward.''

Electronics shipments slipped 15 percent in October from a year earlier, the 21st consecutive drop, following a 10.7 percent decline in September. Sales of electronics products by companies including Chartered Semiconductor Manufacturing Ltd. were worth S$5.64 billion ($3.7 billion) last month.

Singapore's semiconductor shipments fell 7.3 percent from a year earlier in October. Chartered, the world's third-largest maker of customized chips, said last month losses in the current three-month period will mount as demand slumps. The maker of chips for Microsoft Corp.'s Xbox 360 game player has halted overtime work, cut wages and scaled back spending.

Non-electronics shipments, which include petrochemicals and pharmaceuticals, fell 15.5 percent in October from a year earlier. Pharmaceutical shipments plunged 38.9 percent last month.

To contact the reporter on this story: Stephanie Phang in Singapore at sphang@bloomberg.net