Singapore Property and Real Estate News Portal

Jerry Hansin 30 May 2008 World Business News, World News | One Comment

Industry watchers say tech sector to face grim third quarter
By Rachel Kelly, Channel NewsAsia | Posted: 30 May 2008 2247 hrs

SINGAPORE: Exports to the US have taken a hit amid the ongoing sub-prime mortgage crisis in the US. And the tech sector, in particular, has been seeing sluggish sales.

But analysts said that the good news is that some US consumers just cannot seem to shake off the shopping bug.

Leon Perera, Group Managing Director, Spire Research, said: “There have been some new and interesting data releases and some suggest that the recent downturn in the US may not have been as bad as expected.

“I think the recent Q1 economic growth in the US was revised upwards to 0.9 percent and US consumer spending has still not been hit and has not yet moved into negative territory, despite everything that has happened and consumer confidence being so low.”

Still, Singapore companies like Creative Technologies have already been recording losses on the back of slower US sales. And industry watchers expect the upcoming third quarter to be one of the most difficult for the industry this year.

However, they said that sales in the region may help to offset weakness in the US.

Apple is expected to be launching its much-anticipated iPhone in Asia later this year and this is expected to lead to broader sales.

Mr Perera continued: “That does have the potential to stimulate overall demand and stimulate consumer interest, especially in the less matured markets in the region.

“If you look at Taiwan, Korea or Japan, there is greater maturity among the consumers and there is higher penetration of these consumer electronics or consumer IT devices. But there are new frontiers of growth in the emerging countries and Southeast Asian countries like China and India.”

Looking further ahead, sales is also seen picking up at the year-end because of the holiday season. But expectations are that sales will not match those seen in previous years.

Terence Wong, Senior Vice President, Research Department, DMG & Partners, said: “Well, I think we have seen the lowest point. In fact, right now I believe it might be trailing bottom.

“Confidence, consumer confidence may actually return, though I think this may actually not be enough to make it surpass 2006 and 2007 retail sales mark.” – CNA/vm

Singapore Property – Buy, Sell, Rent and Invest
Jerry Hansin (+65)9027 5537
email: jerry@assetomgt.com
website: www.assetomgt.com