SINGAPORE, May 21 (NNN-Bernama) — Singapore’s economy grew by 1.2 per cent on a year-on-year basis in the first quarter 2019, slightly lower than the 1.3 per cent growth in the previous quarter, according to Ministry of Trade and Industry (MTI).
The ministry expects the republic’s Gross Domestic Product (GDP) growth for 2019 to come in at 1.5 to 2.5 per cent.
On a quarter-on-quarter seasonally-adjusted annualised basis, the economy expanded by 3.8 per cent, a reversal from the 0.8 per cent contraction in the preceding quarter, it said in a statement today.
The manufacturing sector contracted by 0.5 per cent year-on-year, a pullback from the 4.6 per cent growth in the previous quarter.
The contraction was on account of output declines in the precision engineering and electronics clusters, which were in turn due to weak global semiconductor and semiconductor equipment demand.
The construction sector grew by 2.9 per cent year-on-year, a turnaround from the 1.2 per cent decline in the previous quarter.
This was also the first quarter of year-on-year growth after 10 consecutive quarters of contraction, it said.
The wholesale & retail trade sector shrank by 1.8 per cent year-on-year, sharper than the 0.8 per cent decline in the previous quarter, on the back of contractions in both the wholesale trade and retail trade segments.
The transportation & storage sector posted a growth of 0.8 per cent year-on-year, extending the 0.5 per cent expansion in the previous quarter.
Growth was mainly supported by the air transport segment, which grew on the back of an increase in air passengers handled at Changi Airport, it said.
On the other hand, MTI said the water transport segment contracted due to a fall in sea cargo handled at Singapore’s ports.
The accommodation & food services sector grew by 1.8 per cent year-on-year, moderating from the 3.5 per cent growth in the previous quarter.
Growth was mainly supported by the accommodation segment, which expanded on the back of an increase in gross lettings at gazetted hotels.
On the other hand, the performance of the food services segment was lacklustre, weighed down by a fall in the volume of sales at restaurants and food caterers.
The information & communications sector expanded by 6.6 per cent year-on-year, faster than the 5.0 per cent growth in the previous quarter.
Growth was driven by the IT & information services segment on account of firms’ robust demand for IT and digital solutions.
The finance & insurance sector grew by 3.2 per cent year-on-year, extending the 3.7 per cent growth in the preceding quarter.
Growth was largely driven by continued expansions in the “others” (payment players and money-changing services) and insurance segments.
Growth in the business services sector eased to 2.3 per cent year-on-year, from 2.6 per cent in the previous quarter, and was mainly supported by the professional services and real estate segments.
The “other services industries” grew at a faster pace of 2.2 per cent year-on-year compared to the 0.3 per cent growth in the previous quarter.
Growth was primarily driven by an expansion in the education, health & social services segment on the back of a continued ramp-up of operations in healthcare facilities.
On the economic outlook for 2019, MTI said the global growth outlook remains clouded by uncertainties and downside risks.
The Ministry said that with the recent trade actions announced by the US and China, there is a risk of a further escalation of the trade conflicts between the US and its key trading partners, especially China.
There also remains the risk of slower-than-expected growth in the Chinese economy, which could be precipitated by the imposition of further tariffs by the US, it added.
MTI noted that the delay in Brexit until Oct 31, 2019, has prolonged economic uncertainty and could further weigh on consumer and business sentiments in the UK and EU.
Against this challenging external economic backdrop, key outward-oriented sectors in the Singapore economy are expected to slow this year.
MTI said the manufacturing sector is likely to see a sharp slowdown in growth following two years of robust expansion.
Growth in outward-oriented services sectors such as wholesale trade and transportation & storage meanwhile is expected to ease in tandem with the moderation in growth in key advanced and regional economies.
Nonetheless, there remain pockets of strength in the Singapore economy, said the ministry.
In particular, the growth of the information & communications sector is projected to remain healthy given firms’ continued robust demand for IT and digital solutions.
At the same time, the education, health & social services segment’s growth is expected to be resilient, supported by the ongoing ramp-up of operations in healthcare facilities.
Meanwhile, the construction sector is likely to see a sustained turnaround after three consecutive years of contraction, as the pickup in contracts awarded since the second half of 2017 is expected to continue to translate into construction activities for the rest of the year, said MTI.
NNN-BERNAMA
