Thursday February 19, 2009

Not just another recession : Singapore NODX exports collapse 34.8% in Jan 2009 in largest fall ever

This article belongs to the Singapore recession watch story arc.

bloomberg.com :

Singapore's exports fell the most in at least 22 years in Jan 2009 as the deepening global recession pared demand for electronics and other goods in all of the island's 10 largest markets. Singapore NODX (non-oil domestic exports) dropped 34.8% from a year earlier, after contracting 20.8% in Dec 2008. Singapore's economy is in its sharpest and deepest recession in the country's history. Electronics shipments plunged 38.4% in January from a year earlier, the 24th consecutive drop. Sales of electronics products by companies including Chartered Semiconductor were worth S$3.85 billion ($2.5 billion) last month. Non-electronics shipments, which include petrochemicals and pharmaceuticals, fell 32.4%.

channelnewsasia.com :

Singapore's Jan 2009 non-oil domestic exports suffered their largest year-on-year fall since records began in 1977, tumbling a worse-than-expected 35%. Compared to the previous year, exports to China fell by 52% in January, while those to the US decreased by 50%. Analysts noted that the decline was worse than that of September 2001, following the terrorist attacks in the US, when exports dropped 30.7%. Across the region, Asian exports have been on the decline as the global economic downturn depressed demand for goods. Other badly hit countries included Japan, South Korea and Taiwan.

- It wasn't that long ago when I was thinking that hey, Singapore's 20.8% drop wasn't nearly quite as bad as Japan's 35% drop, in terms of exports figures. That particular line of thinking lasted all of 2 or 3 days, until this updated NODX figure came in for Singapore for Jan 2009.

I am aghast at this -34.8% NODX fall. The Singapore NODX exports figure is a leading indicator for economic activity, since manufacturing for export makes up a substantial chunk of the economy. In other words, what NODX does this month, the GDP figures will follow, in the subsequent months. We have managed to match and equal Japan's record exports fall. We will very likely match and equal, or, who knows, perhaps exceed Japan's 12.7% GDP contraction.

Regular readers know what my opinion is regarding a GDP contraction of 10% or more. This is not just another recession. A recession is when GDP falls by say 2-3%, for two consecutive quarters or more, and it is usually considered a pretty severe one if GDP falls by say 5-6%. When GDP falls by 10% or more, we might as well get it over with, stop pretending that this isn't what it is, and declare this the Second Great Depression. The only good news perhaps is that this shouldn't be news to you, since this was originally posted in May 2005. I hope you are slightly better prepared now since that time, because you know, as they say, we ain't seen anything yet.

P.S. Check out the photo above of the idle container and other cargo ships parked off the Singapore coast. Read about the Baltic Dry Index collapse for the details.

See also :

1. Singapore economy in recession, GDP contracts 6.3% in Q3 2008, MAS ends currency gain policy
2. Singapore GDP contracted 6.8% annualized in Q3 2008, heads deeper into recession
3. Singapore recession deepens as NODX (non-oil domestic exports) fall 20.8% in Dec 2008
4. Singapore, Taiwan GDP may shrink 10-11% in 2009 : CLSA

(2009-02-19 19:49:32 SGT) [Biz] Permalink

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