Singapore was not alone in manufacturing contraction mode

It's even worse for Asian peers that are in contraction for four months in a row now.

According to CIMB, headwinds are aplenty for trade-dependent Singapore, including recessions in Europe and the slowdown in the US. Singapore’s manufacturing weakness in Sep/3Q12, it said followed similar patterns across export-oriented Asia, with Japan, Korea and Taiwan all in contraction mode for the fourth consecutive month.

"Singapore was likely in a technical recession in 3Q12, defined as two consecutive quarters of contraction. Its economy probably shrank 2% qoq SAAR in 3Q12 (-0.7% in 2Q12), led by a 5% fall in the goods-producing sector,
particularly manufacturing, and a 0.6% dip in the service sector. Yoy, manufacturing probably expanded just 0.1% vs. 2Q12’S 4.6%," said CIMB analyst Song Seng Wun. 

"Assuming the service sector grew at a similar yoy pace as in 2Q11 (1%), advance 3Q12 GDP should come in at 0.8-1% yoy (2Q12 GDP: 3.6%), outside the lower end of the government’s 2012 growth target of 1.5-2.5%. The government will be releasing preliminary 3Q12 GDP data next week, no later than 12 Oct,"  he added.