Wholesale trade slumped in the final three months of last year, confirming a worrying trend over rapidly declining economic activity in the region.

Singapore's foreign wholesale trade, which tracks products traded here for markets overseas, fell 14.4 per cent in the three months to Dec 31, compared with the same period a year before.

The oil price slump was a big factor, with trade in petroleum and petroleum products crashing 25.1 per cent, while trade in ship chandlers and bunkering contracted 35.8 per cent, data from the Department of Statistics showed yesterday.

Oil has been suffering one of the worst price falls as the market continues to grapple with severe oversupply. The metals, timber and construction materials industry also logged a decline of 18.1 per cent in foreign sales.

The numbers show the rapidly declining sentiment levels in the region, said CIMB Private Bank economist Song Seng Wun.

"Basically, Singapore is a proxy for trade in the region.

"The latest numbers show things are bad here," he said.

"There are less enthusiastic consumers who are cutting back, which will naturally lead to falling trade as producers send out less of their products to the export markets," he added.

The data showed a similar picture emerging in Singapore's domestic wholesale trade.

The declines were led by ship chandlers and bunkering, which dropped 44.1 per cent, while petroleum and petroleum products trade fell 23.6 per cent here.

But it may be too early to say a recession is near, said Mr Song.

"The industrial production figures for January in Singapore will be out next week and we expect the data to show a rough patch, especially in January and February," he said.

"But it may be too early to say if a recession is imminent. A lot has to do with the fear factor. If we all believe a recession is coming, we will talk it into happening by staying at home and not spending."