SINGAPORE: Singapore on Thursday reported a sharper-than-expected fall in October exports as shipments of semiconductors plunged, reflecting further weakness in the global electronics industry.
The Southeast Asian city-state's non-oil domestic exports (NODX) fell 16.2 percent in October from a year ago, confounding economists who had on average had expected an 8 percent drop.
On a month-on-month seasonally adjusted basis, non-oil domestic exports fell 5.9 percent.
Semiconductor exports, which make up nearly half of Singapore's electronic exports, plunged 33.4 percent from a year ago, partly reflecting the sharp drop in the closely followed monthly book-to-bill ratio published by the U.S.-based Semiconductor Equipment and Materials International (SEMI).
"The sharper-than-expected contraction in NODX is in part due to high base, but the continued and deeper weakness in electronic exports looks worrying," said Chow Penn Nee, an economist at United Overseas Bank.
"There doesn't seem to be any sign of Christmas orders amidst lackluster demand in the U.S. and EU," she added.
Chow said UOB might lower its full-year GDP estimate for Singapore from the current 4.8 percent, which is already below the government's forecast of around 5 percent.
Exports from Asia have taken a hit amid continued economic weakness in the United States and Europe, and factory activity in many economies have slowed.
For instance, China's official purchasing managers' index (PMI) fell to 50.4 in October from 51.2 in September, while Taiwan's PMI dropped to a 33-month low, though demand has remained strong for hot-selling Apple Inc products and smartphones.
The Philippines, another major electronics exporter, also reported a sharp plunge in shipments in September.
Despite some signs of a strengthening U.S. economy in the last few months, including an increase in October retail sales, American consumers remain cautious heading into the holiday shopping season. Analysts also warn Europe is almost certainly facing recession, and its corrosive debt crisis could act as a further brake on the global economy.
Some economists noted domestic factors such as rising costs and the increasing difficulty in hiring foreign workers due to tigher government regulations had also contributed to Singapore's export weakness.
"The top three labour concerns raised by the members included: difficulty in attracting local employees; increase in cost of hiring foreign workers; and dependency ratios imposed on companies for hiring foreign workers," the Singapore Manufacturers' Federation said in a recent statement.
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