Singapore's exports plunged far more than expected in February from a year earlier, hurt by a sharp drop in shipments of pharmaceuticals and oil rigs in the Lunar New Year holiday lull.
But electronics recovered slightly from January, after taking into account seasonal factors, indicating the worst could be over the city-state's exporters.
"This time around, the weakness in exports was due to non-electronics," said Barclays economist Leong Wai Ho. Leong said Singapore's electronics sector could recover further in coming months, given the recovery in North Asia where semiconductor plants were running near full capacity.
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The city-state's non-oil domestic exports (NODX) fell 30.6 percent last month from a year ago as exports of electronics dropped 27.4 percent and shipments of pharmaceuticals declined 56.5 percent, trade agency International Enterprises Singapore (IE Singapore) said on Monday.
Exports of ships and boats, a category that includes offshore oil rigs, fell 99.4 percent in February from a year ago. The sharp drop in NODX followed a subdued January when shipments grew by just 0.4 percent year-on-year despite the timing on the Lunar New Year.
On a seasonally adjusted month-on-month basis, NODX shrank 2.4 percent even though most economists had forecast an expansion. IE Singapore said, however, that electronics grew in February from January after taking into account seasonal factors.
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Economists polled by Reuters had expected exports to fall 16 percent year-on-year but rise 4.5 percent month-on-month after seasonal adjustments.
The Singapore dollar fell after the release of the trade figures, but most commentators attributed the decline to the U.S. dollar's strength against other currencies.
The Singapore dollar, being pegged to a basket of currencies, tends to weaken against the greenback when investors are bearish about the euro and yen.
"We still think the MAS (Monetary Authority of Singapore) is more likely to keep its current settings, but sustained weakness in economic data may increase the odds for an easier policy," Credit Agricole senior strategist Frances Cheung said in a note to clients, referring to the central bank's current bias for a modest and gradual appreciation of the Singapore dollar.
Singapore's monthly exports tend to be unpredictable because a significant portion involves inputs for pharmaceuticals and oil rigs, which can vary sharply from month to month.
The volatility in the data was made worse by the Lunar New Year holiday, which began on Feb. 10 this year. In 2012, the holidays started on Jan 23. Factories in the city-state tend to shut for as long as a week during the Lunar New Year holidays.