Singapore non-oil trade index drops 17% in June

Asian Economic News, July 23, 2001

SINGAPORE, July 17 Kyodo

Singapore's non-oil domestic exports (NODX) plunged a worse-than-expected 16.9% last month over the same month last year, according to government data released Tuesday.

Analysts had been expecting drop of about 10% in the NODX, which refers to exports of goods manufactured in Singapore.

The Trade Development Board (TDB), which released the monthly trade data, said the NODX tumbled 16.9% to S$7.8 billion (US$4.2 billion) after sliding 9.0% in May and 1.4% in June.

The last time the monthly NODX contracted so sharply was May 1985 when it fell 17.7% amid a severe economic recession that hit the region, said a spokeswoman from the TDB, which released the data.

Double-digit contraction was not even seen during the 1997 and 1998 Asian economic crisis, she said.

She added export performance is expected to get worse in the third quarter while prospects for the fourth quarter are still unclear.

Non-oil exports to the United States, Singapore's largest market, plunged 24.5% last month, worse than the 17.1% decline in May, the data show.

Similar exports to the other key markets also deteriorated sharply.

Exports to the European Union fell 17.7% after rising 4.7% in May, exports to Japan fell 10.7% after rising 16.8% in May, exports to neighboring Malaysia fell 17.4% after dipping 6.4% in May and exports to Taiwan sank 38% after dropping 27.1% in May.

The NODX is a closely watched as one of the key indicators of the health of the export-dependent economy. About two thirds of the NODX are electronic goods, which in turn account for 12% of the Singapore economy.

For the first half of this year, the NODX slipped 3.2% from the same period last year when the NODX rose 11.6%.

An analyst with a foreign stock research firm said that unlike the Asian economic crisis in 1997 and 1998, the economic downturn that has hit Singapore hard this time is concentrated in the electronics sector, while other sectors are still growing.

Singapore's economy is now in recession and the government earlier this month slashed its economic projection for this year to 0.5% to 1.5% from an earlier forecast of 3.5%-5.5%.