Reuters
December 18, 2001
SINGAPORE


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SINGAPORE suffered yet another slide in non-oil exports in November but the lower than expected fall indicated the worst may be over for the recession-hit economy, analysts said.

November trade data released on Tuesday (Dec 18) showed a 21.1 percent decline in non-oil domestic exports (NODX) to S$7.99 billion (US$4.35 billion), its ninth consecutive monthly fall and in line with the 21.6 percent drop in October. But the number followed a record 30.7 percent slump in September.

"Looking at the last two months, the contraction seems to have stabilised. If this is sustained, we should be on track for a recovery in the second half of next year, which is what the markets are already expecting," said Kaan Quan Hon, economist at DBS Group.

The Singapore stock market picked up following the figures and the key Straits Times Index closed 1.61 percent higher at 1583.60. The Singapore dollar was little changed on the news and quoted at around 1.8385 to the US dollar in late afternoon.

The trade-driven city state, reeling from the global economic slowdown and waning electronics demand even before the September 11 attacks on the United States, is on course for a three percent contraction this year after blazing 9.9 percent growth in 2000.

"The worst is probably past and (NODX) should continue to improve in December, especially coming off a lower base last year," said Charlie Lay, an analyst at 4cast in Singapore.

Five economists polled by Reuters had forecast a fall of 24.7 percent in November on average, with the range between 18 percent and 28 percent.

"It's better than we had expected. We were looking for a 23.2 percent dip," said Song Seng Wun, an economist at G.K. Goh. "I suppose it's a confirmation that we are indeed bottoming out as far as Singapore's key manufacturing sector is concerned."

RISK ON CONSUMERS

UOB Kay Hian economist Tan Kang Yong, who is also looking for a second half rebound in 2002, said the only risk to recovery was the strength of consumer demand.

"The worst is probably over for exports and we expect the manufacturing numbers to show a similar trend," he said. "But there is some risk on the consumer numbers. We have to see the data in January and February, whether there is a pick up after the year end."

Electronics exports -- a major driver of Singapore's economy representing about two-thirds of NODX, half of manufacturing and 12-13 percent of gross domestic product -- fell 24 percent to S$4.99 billion in November. Oil exports were down 22.5 percent.

The Trade Development Board (TDB) said total trade fell 19.5 percent to S$34.63 billion, with imports down 21.3 percent to S$16.57 billion. In real terms, NODX fell 18 percent from November 2000 to S$9.6 billion.

"The global electronic demand remained in its persistent slump while the major economies continued to slow," the TDB said in a statement. "With the exception of Hong Kong, NODX to all of the top 10 markets remained in negative territory in November."

Exports to the United States, the city state's second-largest trading partner after neighbouring Malaysia and a key market for its electronics goods, fell a nominal 29.9 percent after a 28.7 percent drop in October and a 46 percent plunge in September.

Singapore -- battling its worst recession since 1964 -- is working to overhaul its economy to lessen its reliance on electronics.