SINGAPORE - Fewer shipments from electronics firms sent Singapore's exports down unexpectedly in May despite signs that factories had been stepping up production in recent months.
Non-oil domestic exports fell 4.6 per cent last month over the same month last year, trade agency IE Singapore said yesterday.
Economists had projected a contraction of just 0.2 per cent, improving from April's 1 per cent dip.
But they were let down by electronics shipments, which fell by a larger-than-expected 13.2 per cent in May over a year ago.
This was largely due to a continued slump in demand for personal computer parts, disk media products and integrated circuits, IE Singapore said.
Non-electronics exports such as pharmaceuticals helped offset this fall, but they rose by only a "marginal" 0.2 per cent, it added.
May's poor export performance was a surprise as the manufacturing sector had seemed to be gaining steam since April, implying that demand - including export demand - was on the rise.
Factories cranked out 4.7 per cent more output in April over a year earlier, while the purchasing managers' index, an early indicator of manufacturing performance, hit a two-year high in May.
The divergence between how much factories are producing and how much they are selling abroad has raised concerns that inventories are building up.
If demand falls short of supply, manufacturers could be stuck with too much inventory and reduce factory activity later this year, economists say.