As one of the world's most open economies, Singapore is often seen as a bellwether for the global economy so slumping exports here could be an early indicator that things are looking quite dire indeed.
Non-oil domestic exports (Nodx) fell 9.9 per cent last month compared with the same month last year - a far worse result than the 7.6 per cent contraction many economists had been anticipating.
It was the third consecutive fall in monthly shipments and made worse by the fact that nearly all of the major product categories saw red.
Electronic exports fell 0.6 per cent, while non-electronic products plunged 13.9 per cent.
What is perhaps more disturbing is the effects of a slowdown in China and how the oil glut is hitting our shores in a direct and uncomfortable manner.
At the heart of the discomfort is the sudden slump in global demand, dragged down by a weakening China.
Exports to China crashed, falling 25.2 per cent last month compared with January last year, suggesting that the slowdown there could be worse than previously estimated.
In fact, Singapore's exports to China have been on a downtrend since their peak in December 2013, according to IE Singapore.
This was the biggest drop in Singapore's exports to China in seven years, according to Bank of America Merrill Lynch economist Chua Hak Bin.
Its neighbours, Taiwan and Hong Kong, are also suffering. Singapore's Nodx to Taiwan fell 26.5 per cent while shipments to Hong Kong contracted 9.6 per cent.
It is a similarly depressing story for oil-related industries: The value of petrochemical exports dropped 18.3 per cent over the year.
Barclays Capital economist Leong Wai Ho estimates that the faltering oil rig industry accounted for a big chunk of the 13.9 per cent fall in non-electronic exports.
In other words, the combined effect of a weak China and even weaker oil prices will wreck havoc on trade-dependent economies such as Singapore.
If anything, last month's export data was a red flag which is signalling the very real possibility of a full-blown recession in the months ahead.
Dr Chua expects growth to slow even further this year, down from the 2 per cent that he originally forecasted.
"We now see non-negligible risk of a technical recession," he said.
DBS economist Irvin Seah was even more downbeat, saying that the latest export data was plain bad news.
"The Nodx numbers will add on to the growing list of dire economic data. If such a trend persists, the recession will become a real threat," he added.
If this scenario pans out, the Government may be forced to intervene.
The first level of defence is likely to be the currency.
Economists expect the central bank to ease monetary policy by allowing for a weakening of the Singapore dollar.
That could ease some pressure for exporters, which have had to deal with their rivals' weaker currencies in territories such as China and Taiwan.
A second layer of defence is for the Government to roll out a support package for companies in the upcoming Budget, said Dr Chua.
Tax rebates for companies or reducing foreign worker levies could help ease costs.
But Finance Minister Heng Swee Keat may just want to save his bullets in case things turn much worse later on.
Given the murky outlook so far, this could be the most prudent course of action.
This article was first published on February 18, 2016.
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