SINGAPORE (Nikkei Markets) -- Singapore's key exports fell much more than expected in January, the latest in a spate of weak economic data that have underlined the risks facing the city-state as global growth slows.
Trade agency Enterprise Singapore said non-oil domestic exports contracted 10.1% in January from a year ago, marking the deepest fall since October 2016 when the indicator dropped 14%. January's decline was the third in as many months and much worse than Bloomberg's consensus estimate for a drop of 3.4%.
"The ongoing U.S.-Sino trade tensions and its negative spill-over effect on Asia's external environment remain...the biggest wildcard for Singapore's trade outlook," said Barnabas Gan, an economist at United Overseas Bank.
Exports to all the top-10 markets declined, with shipments to China sliding 25.4% year on year following a 15.4% expansion in December. Those to the U.S. fell 4.6% following an increase of 31.1% in the previous month.
On a month-on-month seasonally adjusted basis, non-oil domestic exports decreased by 5.7% in January to 13.4 billion Singapore dollars ($9.9 billion). This followed the previous month's sequential decline of 4%.
Singapore reports non-oil domestic exports as these provide a better gauge of economic activity. This is because prices of refined oil products tend to be volatile, while total exports include the billions of dollars of goods produced elsewhere that are shipped through the city-state's container ports, the world's second busiest after Shanghai's.
Monday's exports data come just days after Singapore announced a downward revision to economic growth for the fourth quarter of 2018. At the same time, the authorities said this year's gross domestic product expansion growth could come in "slightly below the mid-point" of the official 1.5% to 3.5% forecast.
Retail sales figures released last week showed a 6% fall for December from a year ago. Overall retail sales for the whole of 2018 was down by 0.7%, the first annual contraction since 2013.
According to Enterprise Singapore, exports of electronics declined by 15.9% in January after a 11.2% decrease in the previous month. Personal computers, disk media products and integrated circuits contributed the most to the decrease.
UOB's Gan said the drop in electronics shipments was the worst since June 2014 and indicates that the slowdown in the global technology cycle will continue to be a dampener on Singapore's exports.
Domestic exports of non-electronics fell by 7.9% on year, led by sharp drops in shipments of specialized machinery, petrochemicals and non-electric engines and motors.
Robert Carnell, chief economist and head of research for the Asia-Pacific at ING, described the 11.8% fall in petrochemical exports as "very worrying." "This points to a broad weakness in external demand, with these (petrochemical) products ubiquitous in almost all production and packaging," he said. The government's budget, due later Monday, "will likely need to incorporate some offsetting measures to stimulate the domestic economy in the face of mounting external weakness," he added.
Singapore's non-oil domestic exports rose by 4.2% in 2018, following an 8.8% increase in 2017. This year, Enterprise Singapore expects growth between zero and 2%.