Singapore GDP grows 1.5% year-on-year in Q4 2014 as manufacturing shrinks

THE Singapore economy grew a weaker-than-expected 1.5 per cent year-on-year in Q4 2014, slowing from Q3's 2.8 per cent expansion as the manufacturing sector shrank in the final quarter.

The median forecast of six economists polled by Bloomberg before the Ministry of Trade and Industry (MTI) released advance GDP (gross domestic product) estimates on Friday morning was for Q4 growth of 2.2 per cent.

In quarter-on-quarter terms, the market economists' median forecast of an annualised 3.1 per cent growth rate turned out to be optimistic too. MTI's advance estimates point to a quarter-on-quarter annualised growth rate of 1.6 per cent in the quarter, after seasonal adjustments. This was also a slowdown from Q3's 3.1 per cent quarter-on-quarter expansion.

All the key sectors weakened in the final quarter of 2014.

Manufacturing contracted 2 per cent year-on-year due to a decline in transport engineering, electronics and general manufacturing output. In quarter-on-quarter terms, manufacturing shrank an even larger annualised 5.8 per cent.

The services sector grew 2.6 per cent year-on-year in Q4, supported by the finance and insurance, and business services sectors. But this was slower than its 3.4 per cent expansion in Q3.

Construction activity grew just 0.8 per cent year-on-year in Q4, supported by public-sector construction works. But the sector grew an annualised 8 per cent quarter on quarter, quicker than Q3's 0.1 per cent expansion.

Growth of 1.5 per cent in Q4 implies that the economy grew 2.8 per cent over the whole of 2014, as Prime Minister Lee Hsien Loong announced in his New Year Message on Wednesday.

The government has said that it expects the economy to grow by 2-4 per cent in this new year.