It was the fifth consecutive month of decline in industrial output, which accounts for a quarter of the Singapore economy, according to the Economic Development Board. The drop far exceeded the 13.2 percent fall in July.

The fall reinforced predictions that the economy would shrink for a third consecutive quarter, a prospect that prompted the government September 25 to promise extra spending to bolster growth.

"We need that second spending package badly," said Song Seng Wun, a regional economist at G.K. Goh Research Pte in Singapore, who expects the economy to shrink at an annual rate of between 5 percent and 6 percent in the third quarter.

Finance Minister Richard Hu said September 25 the new package would be "more substantial" than the S$2.2 billion (US$1.2 billion) of measures announced in July, which included cuts in taxes and fees as well as spending on public works.

The package aims to help alleviate rising unemployment. The government expects about 20,000 people to lose their jobs this year, about twice as many as last year. In August, production in the electronics industry, which makes up half of the manufacturing sector, dropped 37.5 percent from a year earlier, compared with a 33 percent decline in July.

"Weak demand prevailed for the major electronic products and components, including semiconductors, telecommunications equipment, computers and computer peripherals," the board said.

Chemicals, which account for 11 percent of the total, fell 8.8 percent from a year earlier, reversing a 0.7 percent gain in July, the board said. (Bloomberg, AFP)