SINGAPORE: A strong showing by the manufacturing sector again boosted Singapore's economy in the first quarter of this year, according to advance estimates released by the Ministry of Trade and Industry (MTI) on Friday (Apr 13).
Going forward, the Singapore economy should continue to expand at a steady pace, although risks remain from an escalation of the trade dispute between the United States and China, which could have significant consequences for global trade, the Monetary Authority of Singapore said in a separate statement announcing a tightening of monetary policy.
On a quarter-on-quarter seasonally adjusted annualised basis, gross domestic product grew by 1.4 per cent, easing from the 2.1 per cent growth in the fourth quarter of last year.
The manufacturing sector remained the brightest spot in the economy with an expansion of 10.1 per cent on a year-on-year basis, a surge from the 4.8 per cent growth in the previous quarter.
"The manufacturing sector remains in the driving seat. However, growth in the manufacturing sector will likely moderate as global economic conditions normalise," said DBS senior economist Irvin Seah.
"Global demand for electronics is showing some signs of lethargy. Growth in global electronics shipment is flattening out while billing growth is moderating, essentially pointing to slower pace of expansion for the Singapore manufacturing sector going forward," he added.
On a quarter-on-quarter basis, growth in the sector came in at 23.3 per cent, a sharp turnaround from the 14.8 per cent contraction in the fourth quarter.
Services, which account for two-thirds of the economy, expanded by 3.8 per cent year-on-year – up from 3.5 per cent in the previous quarter – on the back of growth in the finance and insurance as well as wholesale and retail trade sectors.
The construction sector contracted by 4.4 per cent, extending the 5 per cent decline in the previous quarter. The weak performance was due to a fall in both private-sector and public-sector construction activities, MTI said.
Analysts said that although the construction sector remained in contraction, the pace of decline is easing and the sector could begin seeing brighter days soon.
"The recent en bloc fever and broad-based pick-up in the residential property segment, a key drag for the construction sector in the past, could hint of better days ahead for the sector," said DBS' Mr Seah.
The advance estimates take into account data in the first two months of the quarter. MTI will release the GDP figures for the first quarter in its Economic Survey of Singapore next month.