Singapore exports in longest slump since global crisis

Singapore’s exports in June extended the longest run of declines since the global financial crisis, suggesting economic growth last quarter may have been less than the government initially estimated.

Non-oil domestic exports slid 8.8% from a year earlier, falling for a fifth month, the trade promotion agency said in a statement today. The median of 17 estimates in a Bloomberg News survey was for a 5.8% drop.

While Singapore’s economy grew at the fastest pace in more than two years last quarter as services strengthened and manufacturing rebounded, improvements haven’t been matched in shipments to the U.S. or Europe. The Asian Development Bank yesterday trimmed forecasts for growth in developing Asia, as cooling exports from South Korea to Malaysia underscore weakness in Chinese growth and world demand.

“External headwinds remain strong,” Irvin Seah, a Singapore-based economist at DBS Group Holdings, said before the report. “Data from the U.S. have been mixed and Europe is still stuck in recession.”

The Singapore dollar was little changed at $1.2613 against the U.S. currency as of 10:04 a.m. local time. The currency has weakened about 3% in the past six months even as the central bank maintained a policy of allowing gradual gains.

‘DELAYED’ RECOVERY

Demand from the U.S., Europe and Japan stands out for its “weakness and that is still a cause for concern,” said Alvin Liew, a senior economist at United Overseas Bank in Singapore. “The recovery process for exports, especially for electronics, could be delayed.”

Singapore’s gross domestic product rose an annualized 15.2% in the three months through June from the previous quarter, when it grew 1.8%, the Trade Ministry said July 12. The figures were computed largely from data in the first two months of the quarter, and revised numbers will be released next month.

The island’s shipments of electronics dropped 12.4% in June from a year earlier, extending the slump to an 11th month, today’s report showed.

“The weak growth coming from the advanced economies, the weak demand, is having a much bigger effect than we had anticipated,” ADB assistant chief economist Joe Zveglich told Bloomberg Television’s Susan Li in an interview in Tokyo.