Singapore’s export growth rose at a less-than-expected pace in July as shipments of pharmaceuticals and electronics cooled amid a weakening global economy.
Non-oil domestic exports climbed 18.2 percent from a year earlier, after a revised 28.5 percent gain in June, the trade promotion agency said in a statement in Singapore today. The median forecast of nine economists surveyed by Bloomberg News was for an increase of 20.1 percent.
A surge in production and exports in the first half of 2010 has put Singapore in the running to be the world’s fastest- growing economy this year. Overseas demand, which has lifted export-dependent Asian economies including Singapore and China, may falter as governments in Europe embark on austerity programs to cut deficits and households in some of the world’s largest economies hold back spending.
“While the export performance of the key electronics industry has been robust in recent months, the softer external demand is expected to weigh on sales going forward,” Irvin Seah, an economist at DBS Group Holdings Ltd. in Singapore, said before the report.
Electronics shipments by companies including Venture Corp., Singapore’s biggest electronics contract manufacturer, climbed 25.7 percent in July from a year earlier to S$5.6 billion ($4.1 billion), after a 43.9 percent gain the previous month.
Pharmaceutical Sales
Non-electronics shipments, which include petrochemicals and pharmaceuticals, gained 14.1 percent. Pharmaceutical shipments fell 23.5 percent after climbing a revised 29.7 percent in June.
The performance of Singapore’s pharmaceutical industry is volatile as production swings by companies such as Sanofi- Aventis SA can cause industrial output to fluctuate from month to month. Drug companies sometimes shut plants for cleaning before making different products.
Singapore’s non-oil exports fell a seasonally adjusted 3.9 percent last month from June, when they dropped 0.1 percent, today’s report showed.
Sales to the European Union, Singapore’s biggest export market, grew at a slower pace last month, climbing 26.1 percent from a year earlier compared with a 75.1 percent surge in June.
“The implementation of fiscal austerity measures in some European economies, combined with the weakening of the euro, could further weaken EU domestic demand,” Singapore’s Trade Minister Lim Hng Kiang said yesterday. “These developments could affect Singapore’s export performance, given that the EU as a whole accounts for 12 percent of our domestic exports.”
To contact the reporter on this story: Shamim Adam in Singapore at sadam2@bloomberg.net
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