Singapore services receipts up 15.4% in Q4, higher than pre-Covid figures

SINGAPORE'S services industries saw business receipts rise 15.4 per cent year on year for the fourth quarter, according to the Department of Statistics (Singstat) on Friday (Feb 25).

Q4's business receipts were even higher than in the fourth quarter of 2019, before the Covid-19 pandemic, Singstat's data showed.

On a quarter-on-quarter, non-seasonally adjusted basis, business receipts were also up 7.2 per cent.

However, Singstat's business receipts index excludes wholesale trade, retail trade, and accommodation and food services, which are tracked separately.

Maybank Kim Eng economist Chua Hak Bin said the higher business receipts in Q4 is in line with the recovery in the services sector, which grew 4.4 per cent in real terms in Q4 compared to a year ago.

"Higher prices, not just volumes, are also driving business receipts up," he added, pointing to the examples of higher freight rates for shipping and air cargo rates for airlines.

Agreeing, CIMB Private Banking economist Song Seng Wun said the Q4 figures reflect the state of Singapore's economy now that the borders have gradually opened up and businesses have adapted to and are better equipped to handle the pandemic.

All of the services industries in the index saw both year-on-year and quarter-on-quarter growth in Q4.

On a year-on-year basis, transport and storage services saw the largest growth of 49.3 per cent, which Singstat attributed to air transport firms seeing an increase in business activities due to the easing of borders.

Shipping lines also contributed to the rise as they saw an increase in freight rates and volumes in Q4, resulting in higher revenue for the water transport segment.

Aside from the resumption of travel, Song said the growth seen by the sector could also be due to businesses stocking up and ordering their inventories ahead of time due to worries over supply chain disruptions.

Chua said business receipts for the air transport sector could see the biggest rise in 2022 if Singapore continues to open up its borders to more countries and relax its quarantine requirements after the Omicron Covid-19 wave passes.

Information and communications services saw high turnover of 32.4 per cent, due mainly to the high turnover from firms engaged in software publishing - including games publishing - and online marketplaces.

Both industries saw double-digit growth on a quarterly basis.

On a quarter-on-quarter basis, recreation and personal services saw the biggest change in receipts of 25.6 per cent, which Singstat said was led by the attractions and gaming segments.

The professional services industry also saw high revenue gains of 13.4 per cent, mainly from head office and architectural and engineering activities.

Chua expects business receipts for the services industries to continue recovering in 2022, driven by the reopening of the economy, relaxation of border control measures, as well as rising prices and costs.

"Rising wage costs and the economic reopening will likely raise the fees for professional, recreation and professional services this year," he said.

Song was similarly optimistic, but cautioned that the ongoing conflict between Russia and Ukraine could have an impact on business and consumer confidence.

"But otherwise, I would still say that the trend of improvement is likely to persist into Q1," he said.