SINGAPORE (Reuters) - Singapore’s exports unexpectedly fell from a year earlier in September, data showed on Tuesday, their first on-year contraction in five months as electronics shipments posted their first decline in almost a year.
Non-oil domestic exports fell 1.1 percent in September on-year, data from the trade agency International Enterprise Singapore showed, the first fall since April’s 0.6 percent decline. The September contraction was a stark contrast to analysts’ forecasts for a 12.7 percent increase.
“We had already been expecting electronics exports to moderate eventually. It was always going to be very difficult to sustain double-digit electronics growth, both on export and production side. We have always been very cautious on this sector,” said Nomura economist Brian Tan.
In August, exports grew a revised 16.7 percent from a year earlier.
Electronics exports, a major driver of the city-state’s trade in recent months, fell for the first time since October 2016, contracting 7.9 percent in September from a year earlier.
Analysts said it was too early to say whether the data marks a minor blip or a deeper correction in the broader surge in demand for electronics goods.
Singapore and other trade-dependent Asian economies have gained a big boost this year from improved global demand, particularly for electronics products and components such as semiconductors.
Asia’s other tech export powerhouses, South Korea and Taiwan, posted stronger-than-expected shipments in September, boosted by continued strong global demand for memory and processing chips. China’s export growth also picked up in the month.
Stronger global trade in general this year has also benefited Singapore, which boasts one of the world’s largest container ports and a global air cargo hub.
However, ING economist Prakash Sakpal said in a research note the weak September exports raise the prospects of a downward revision in third quarter GDP growth.
On a seasonally adjusted month-on-month basis, exports in September fell 11.0 percent after a 4.5 percent rise in August, the sharpest decline since June 2016 when exports fell 13.0 percent.
The Reuters poll had predicted a contraction of 0.1 percent.
In the third quarter, the city-state grew much faster than expected at 6.3 percent from the previous three months on an annualized basis, driven by demand of its tech products.
Analysts say the recovery is too narrow and that growth likely will start to moderate next year.
“Overall, we are expecting GDP growth of 2.8 percent this year, so this is roughly still fitting that picture,” Tan said, adding that data over the next couple of months is required to understand “whether this was more permanent or just a one-off”.
Singapore’s central bank held monetary policy steady last week, although analysts say its policy statement suggests a cautious view about growth next year.
Reporting by Fathin Ungku; Editing by Richard Borsuk and Sam Holmes