SINGAPORE exports showed the smallest decline in eight months in May from a year ago, adding to signs that the recession is starting to ease up.

Non-oil domestic exports contracted just 12.1 per cent, according to the latest figures released by trade agency IE Singapore on Wednesday.

Although this was its 13th month of decline, it was better than the 14 per cent slump anticipated by economists in a Reuters poll. It was also an improvement over the 19.2 per cent decline seen in April.

Mr David Cohen, an economist at Action Economics, said: 'The improvement is consistent with the sense that global demand has bottomed and is starting to pick up, and that would be supportive of growth in the Singapore economy moving forward.'

Moreover, May's exports was also 5.6 per cent up on the previous month's figures after seasonal adjustment, which was better-than-expected. In contrast, April saw a month-on-month slide of 1.4 per cent.

Last month, the local manufacturing sector showed signs of a turnaround. According to the latest Purchasing Managers' Index released two weeks ago, factory output increased for the first time since August last year due to more orders and higher inventory levels.

Electronics exports plunged 21.8 per cent last month, faring slightly better than the 25.6 per cent dive seen in April.

Non-electronics shipments, which include pharmaceuticals and petrochemicals, fell 5.6 per cent in May - an improvement over the 14.8 per cent contraction in April.

The brightest spark was pharma exports, which surged 40.2 per cent compared to the previous year.

Non-oil shipments to Singapore's top 10 markets except Taiwan and South Korea all fell. The largest contributors to the decline were the US, Malaysia and Japan.