Singapore's October exports shrink 12% on-year, raising recession risks

Stacked containers sit among gantry cranes illuminated at dusk at Tanjong Pagar Container Terminal at the Port of Singapore.
SeongJoon Cho | Bloomberg | Getty Images

Singapore's exports in October shrank more than expected as sales to major markets fell, with those to Europe contracting sharply and raising risks of a recession in the trade-dependent economy.

Non-oil domestic exports (NODX) skidded 12 percent last month from a year earlier, the trade agency International Enterprise Singapore said in a statement on Thursday, far worse than the median forecast of a 3.5 percent decline in a Reuters poll.

In September, overseas shipments slumped a revised 5 percent on-year though the decline in sales to China slowed. On a month-on-month, seasonally adjusted basis, exports decreased 3.7 percent in October, missing a forecast of a 1 percent slide in the survey.

Exports to the European Union contracted 28.6 percent last month from a year earlier, compared with 9.9 percent growth in September.

Contraction in sales of pharmaceuticals, non-electric engines & motors, as well as personal computers led the decline in October.

Singapore Exports to Worsen

The downturn in sales to Europe came as those to China fell at a slower pace, though weak October trade data from the world's second-biggest economy indicated global demand remained sluggish at best.

Shipments to China, Singapore's top overseas market, were down 0.1 percent in October from a year earlier, compared with a 2.2 percent slump in September.

Singapore's economy has been hit hard in the past two years as exports fell off due to slow global growth, while the key financial services industry has also suffered recently, raising the risk of a recession. The economy unexpectedly contracted in the third quarter, and has showed few signs of a steady recovery in the past month or so.

Activity at Singapore's factories moderated in October, though an index for the key electronics sector hit a two-year high thanks to new orders and exports, a private survey showed earlier this month.

Exports to the United States shrank 3.7 percent in October compared to the same month of 2015, after contracting 7.4 percent in September.

By product, volatile pharmaceutical's overseas sales decreased 47.0 percent in October after growing 16.2 percent in the previous month.

Total electronics exports last month fell 6.0 percent from a year earlier, compared with a 6.6 percent contraction in September.

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