Singapore's exports slump, Trump raise recession risks

SINGAPORE - Singapore's exports in October contracted sharply as sales to major markets fell, raising the risk of a recession in the trade-dependent economy amid heightened uncertainty around global trade in the wake of Donald Trump's US election victory.

The affluent city-state's economy has been on the ropes in the last two years as exports fell away amid slow world growth, and Trump's upset had added another layer of doubt on trade given his protectionist policy stance.

Non-oil domestic exports (NODX) skidded 12.0 per cent last month from a year earlier, the trade agency International Enterprise Singapore said in a statement on Thursday, far worse than the median forecast of a 3.5 per cent decline in a Reuters poll. "What this number highlights to us is that the cyclical slowdown is also much bigger than what we have been predicting,"said Vaninder Singh, an economist for RBS in Singapore.

Singh said the exports data raised the risk of a recession and added to the chance of further monetary policy easing.

The central bank in October held policy steady despite a surprisingly sharp economic contraction in the third quarter.

But the growing risks of a recession has even raised the prospects of an off-cycle easing, ahead of the Monetary Authority of Singapore's next policy review scheduled in April, some analysts said. "If the weak NODX continues, if you see in the IP numbers it also mirrors what you see in the NODX data, I would say that an easing will probably come sooner rather than in the scheduled April meeting." said Michael Wan an economist for Credit Suisse, referring to industrial production.

5 things Singaporeans should do in the economic slowdown

  • The gloomy outlook in 2016 is expected to result in higher retrenchment figures, a slowdown in employment and horrible news for a whole bunch of industries.
  • NTUC has spoken: They predict that in the first quarter of 2016, 234 workers in unionised companies could be retrenched, a 31 per cent increase from the first quarter of 2015.
  • No matter how useful you think you are to your company, there's a chance your boss thinks of you, yes you, as an unnecessary cost-especially if he can just dump all your work on the guy in the next cubicle.
  • Job hopping is nothing new in Singapore, and while the employment market is still pretty robust, don't quit without another job lined up unless you're okay with the fact that it's probably going to be harder to find a new one than it was last year.
  • Employers are going to find it harder to justify hiring a new guy, so you definitely don't want to be job hunting desperately at that time.
  • If you're a business owner and haven't bothered correcting certain inefficiencies, this is the time to do it, as you could be in for some tough times.
  • While businesses across the board are likely to feel the pinch, if you're in particularly vulnerable industries like tourism and manufacturing, now is the time to see if there are more efficient, more streamlined and cheaper ways to do what you do.
  • Even if you don't find yourself unceremoniously retrenched, if your company is badly affected you can expect a smaller (or even no) bonus, as many people did during the 2008 recession, or even a pay cut.
  • This is not exactly the best time to start a designer bag collection or plan a lavish shopping trip to the factory outlets in California.
  • Everyone's investment mix is different, but if you're a stock investor who buys and holds for the long-term, this may be a good year to monitor stock prices more closely.
  • At this point, many stocks are quite heavily undervalued, and property prices are still on the decline. It's anyone guess when they'll rebound, but for now, investors should pay attention.


Exports to the European Union contracted 28.6 per cent from a year earlier as sales of pharmaceuticals, non-electric engines & motors, as well as personal computers tumbled.

Shipments to China and the United States extended their slide though the pace of declines eased.

US President-elect Trump, who campaigned on a protectionist policy stance, is seen as a further risk to Singapore, analysts said. "The Q4 growth could be negative if we see materialisation of Trump's protectionism. That would significantly disrupt Asian supply chain," said Weiwen Ng, an economist for ANZ in Singapore.

Fiscal stimulus measures could come earlier than monetary policy steps, NG said. The government is expected to announce the next year budget in the first quarter.

Singapore's domestic borrowing costs have already been rising pressured by the recent global bonds rout, so further easing by MAS could add to upside pressure.

Since the MAS manages monetary policy by adjusting the exchange rate rather than interest rates, a weaker Singapore dollar could spur capital outflows and dry up local liquidity.

The three-month Singapore interbank offered rate , a benchmark used to set interest rates on mortgages, rose to 0.91 per cent, the highest since July. "Any easing in exchange rates could tighten financial condition, which is not what they want," Ng said.

No tenants, and no shoppers

  • Empty shopfronts and hoardings are not what you would expect to see at newly renovated shopping complexes, and even less so along Singapore's premier shopping street.
  • Yet that is what you will find when you walk into many of the malls in town.
  • From Orchard Road to the Marina Bay area, malls are struggling with too much retail space, as landlords scramble to attract and retain tenants.
  • This dire retail pickle has made hoardings with stock phrases "Working to serve you better" and "A new shopping experience awaits" the default decor in many malls.
  • It is a classic chicken-and-egg situation. Empty and boarded-up spaces give a poor first impression and attract few customers. Low footfall is bad news for existing tenants and fails to attract new ones.
  • At Shaw Centre, which reopened in 2014 following a massive renovation, about half of the units in the five-storey mall are behind colourful hoardings displaying contact details for leasing inquiries.
  • Next door at Pacific Plaza - once home to Tower Records and fashion brands Miu Miu and Prada - the same dismal scene beckons. Save for an Adidas Originals store, all units on the ground floor are vacant.
  • Stretches of vacant units can be seen in Claymore Connect, the former Orchard Hotel Shopping Arcade. It reopened last October after a revamp and two F&B units have already opened and shuttered in the four- storey mall.
  • Millenia Walk's management says the mall has increased occupancy by more than 20 per cent in the last year and is on track to achieve its occupancy goal of more than 90 per cent by the end of the year.
  • Potted plants are used to fill up space on level two, where there appears to be more empty units than occupied ones.
  • The entire section where Harvey Norman used to be has been cordoned off. A fitness and performance centre is slated to take over the space in October.
  • Bank executive Melissa Tan, 31, who works at one of the nearby office towers, says she goes to the mall for lunch with her colleagues. "Apart from the food, there's nothing much for me to buy or see here."
  • Over at Suntec City, a $410- million redevelopment plan, which took three years to finish, does not seem to have attracted enough tenants to fill up the vast expanse of retail space.
  • One section between Towers 2 and 3 on level three is almost a deadzone. Kiddy rides fill some of the empty spaces.
  • Vacated shops have paper crudely pasted over their signboards and some tenants seem to have left hastily, leaving behind store furniture and display shelves.
  • A store assistant at a furniture shop on that level, who wants to be known only as Mr C. Ho, 38, says he has seen tenants come and go in just the six months that he has been working there.
  • With The Centrepoint currently undergoing renovations, bright red and white hoardings can be seen on nearly every level.
  • While the boards feature happy faces and mouth- watering food pictures, they also make the place feel like a building in stasis.
  • Orchard Road has been especially hard-hit by a dip in tourism spending, which declined 6.8 per cent to $22 billion last year.
  • At Orchard Central, tenant Michael Chen, 35, says: "From levels one to four, there're so many hoardings because of renovation, it's like a dead mall."
  • The renovations are scheduled to be completed later this year. The shops on the lower levels are open for business, but the hoardings make these stores more difficult to find.
  • The many hoardings also give the impression that the entire mall is closed for renovation.
  • A salesman at a boutique on level five, who declines to be named, says: "Sales have dropped by more than 50 per cent since the renovations started."
  • "People think the mall is closed. Especially tourists. When shoppers see that level two has so many hoardings, they don't go to the higher levels."
  • Walking around Wisma Atria, the units are fully filled at basement one and there is a healthy crowd at Food Republic on level four.
  • But levels two and three are rather quiet, after department store Isetan closed last year. It is in the midst of renovations and leasing out the space.
  • From now till June 30, level one where Isetan used to occupy, is taken up by a pop-up flea market by Workshop Element (W.E.) and Togetherly.
  • Though the higher levels of the mall are mostly filled with various tenants that include fashion outlets, jewellery stores and hair and nail salons, the first level of Far East Plaza looks almost deserted.
  • While levels two through five have the odd handful of shuttered units, level one has at least 20 empty units.
  • The only busy spaces on the level are the F&B outlets which include bubble tea store Gong Cha and noodle restaurant Eat.
  • In spite of the many vacant units and stretches of hoardings, landlords contacted say their malls have a healthy occupancy rate: Mandarin Gallery says it is 94 per cent occupied while Orchard Gateway is 98 per cent occupied.
  • But tenants tell a different story. A tenant who wants to be known only as Mr Ho, 52, has a store in basement two in Orchard Gateway. "We see fewer than 10 walk-ins a day. Some days, we don't even make any sales."
  • At Mandarin Gallery, there are many empty units on levels two and three. Some have concrete flooring showing, while others are dusty. The busiest-looking areas of the mall are the rest areas, where the couches are usually fully occupied.
  • Landlords are trying various ways to fill quiet aisles, from offering space to pop-up stores to cutting rentals. Orchard Gateway and Orchard Central offer some tenants rental rebates of between 20 and 30 per cent a month.