Singapore Q1 GDP growth at 1.8% year on year, beats estimates

THE Singapore economy beat estimates to grow by 1.8 per cent year-on-year in the first quarter ended March 31, 2016, unchanged from the previous quarter.

According to the Ministry of Trade and Industry's flash estimates released on Thursday morning, growth was flat on a quarter-on-quarter seasonally-adjusted annualised (qoq saar) basis, a contrast to the 6.2 per cent expansion in the preceding quarter.

The services sector posted its weakest performance in over a year, while expansion in the construction sector quickened pace.

Economists surveyed by the Monetary Authority of Singapore (MAS) earlier had expected a 1.6 per cent growth on year for Q1.

The services sector had a poor showing this quarter. It grew by 1.9 per cent on year, slower than 2.8 per cent in the fourth quarter 2015, making it the slowest pace in over a year. On a qoq saar basis, it shrank by 3.8 per cent from the preceding quarter's 7.7 per cent growth. This was its deepest contraction in over a year.

In contrast, the construction sector, supported by public and private sector activities, quickened its growth pace. It grew by 6.2 per cent year-on-year in Q1, compared to the 4.9 per cent growth in Q4 2015. On a qoq saar basis, the sector grew by 10.2 per cent, up from the 6.0 per cent growth in the preceding quarter.

The manufacturing sector seemed to be slowing its pace of contraction. It shrank by 2 per cent from a year ago, the smallest decrease in over a year. It was weighed down by a decline in the output of the transport engineering, precision engineering and electronics clusters. The sector had declined by 6.7 per cent in Q4 2015.

The sector's performance on a qoq saar basis, however, was a strong expansion of 18.2 per cent, as compared to the 4.9 per cent decline in the preceding quarter.

MTI will release the preliminary GDP estimates for the first quarter, including performance by sectors, sources of growth, inflation, employment and productivity in its Economic Survey of Singapore in May.