Chart of the Day: Singapore's export competitiveness deteriorates

This hurts the manufacturing sector.

DBS Group Research noted:

The manufacturing sector is likely to have contracted by 0.9% YoY in the third quarter, against the advance estimate of a 0.7% expansion.

Most of the drag came about from an unexpected decline in output growth in September when both electronics and the pharmaceutical industries performed poorly.

While weak external demand is the obvious reason, a more subtle factor to this poor outcome is the deterioration in Singapore’s relatively export competitiveness.

Singapore real effective exchange rate has continued to appreciate vis-à-vis regional peers due to a relatively higher domestic inflation as well as the strengthening of the Sing dollar. This inevitably hurts export and the manufacturing sector.