Singapore’s exports rose for a seventh month in May as a surge in electronics shipments offset declining overseas sales of pharmaceuticals.

Non-oil domestic exports climbed 24.4% from a year earlier, after a revised 30% gain in April, the trade promotion agency said in a statement in Singapore today. The median forecast of 10 economists surveyed by Bloomberg News was for an increase of 25.7%.

 

Singapore has raised its growth forecast twice this year as overseas demand for its computer chips and manufactured goods recovers from last year’s slump. The island’s economy expanded an annualized 38.6% from the previous three months in the first quarter.

 

Higher exports in May “will set the stage for an encouraging outcome in production as well as gross domestic product” for this quarter, Irvin Seah, an economist at DBS Group Holdings in Singapore, said before the report.

 

Taiwan Semiconductor Manufacturing Co., the world’s largest contract manufacturer of computer chips, said this week global chip-industry sales will climb almost 30% in 2010, higher than an April forecast of 22%.

 

Electronics shipments by companies including Venture Corp., Singapore’s biggest electronics contract manufacturer, climbed 38.9% in May from a year earlier to S$5.4 billion ($3.9 billion), after a revised 21.2% gain the previous month.

 

Non-electronics shipments, which include petrochemicals and pharmaceuticals, jumped 16.2%. Pharmaceutical shipments fell 32.8% after dropping 27.8% in April.

 

The performance of Singapore’s pharmaceutical industry is volatile as production swings by companies such as Sanofi- Aventis SA can cause industrial output to fluctuate from month to month. Drug companies sometimes shut plants for cleaning before making different products.

Singapore’s non-oil exports fell a seasonally adjusted 0.1% last month from April, when they gained a revised 2.5%, today’s report showed.

 

Sales to the European Union, Singapore’s biggest export market, grew at a slower pace last month, climbing 5.7% from a year earlier compared with a 21.3% increase in April.

 

“One of the key risks for Singapore trade we see is the potential spillover impact of the Europe sovereign-debt crisis on trade flows and trade financing to the region,” said Alvin Liew, an economist at Standard Chartered Plc in Singapore. “Singapore, being very trade-dependent compared to many of the regional economies, could be one of the first to manifest the ‘Europe debt effect’ in its trade data.”