Singapore economy grows 2.7% year on year in Q1, but just 0.1% sequentially

SINGAPORE’S economy grew 2.7 per cent year on year in the first quarter of 2024, improving from the previous quarter’s 2.2 per cent growth, advance estimates from the Ministry of Trade and Industry (MTI) showed on Friday (Apr 12).

But on a seasonally adjusted quarterly basis, gross domestic product rose by a marginal 0.1 per cent, slower than the previous quarter’s 1.2 per cent growth.

Both year-on-year and quarter-on-quarter expansion were also below economists’ expectations of 3 per cent and 0.5 per cent growth, respectively, in a Bloomberg poll.

Manufacturing growth slowed to 0.8 per cent year on year in Q1, down from the 1.4 per cent expansion in the previous quarter.

Increased output in the chemicals, precision engineering and transport engineering clusters “more than offset” decreases in the electronics, biomedical manufacturing and general manufacturing clusters, MTI said.

Sequentially, the manufacturing sector contracted by 2.9 per cent, reversing from the previous quarter’s 4.5 per cent growth.

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OCBC chief economist Selena Ling noted: “While there were hopes of green shoots emerging in the global electronics industry, this did not really manifest in the domestic electronics cluster.”

Construction grew 4.3 per cent year on year, slowing but extending the 5.2 per cent growth in the quarter prior.

Growth during the quarter was supported by an increase in public-sector construction output, even as private-sector construction output declined, MTI said.

The construction sector contracted by 1.7 per cent sequentially, pulling back from the 2 per cent expansion in the preceding quarter.

In contrast, overall services growth improved to 3.2 per cent, from 2 per cent the quarter before. On a seasonally adjusted quarterly basis, services grew 1.2 per cent, improving from the previous quarter’s 0.3 per cent rate.

Noting that the services sectors outperformed the goods-producing industries in sequential terms, Ling said that services were “largely boosted” by a rebound in accommodation and food services, real estate, administrative and support services and other services.

Growth in this group of services sectors was 2.9 per cent year on year, up from 2 per cent the previous quarter, and 2.2 per cent sequentially, turning around from the 0.7 per cent contraction in Q4.

“In particular, the accommodation sector saw robust growth due to a strong recovery in international visitor arrivals,” MTI said.

The “slew of concerts” in Q1 also provided a “temporal boost” to consumer-facing sectors, Ling added, citing the multi-night Coldplay and Taylor Swift concerts.

Within services, the wholesale and retail trade sector, along with the transportation and storage sector, collectively grew by 2.7 per cent on the year, faster than the 1 per cent growth in Q4.

Sequentially, the sectors expanded by 1.4 per cent in Q1, improving from the 0.7 per cent contraction in the previous quarter.

The group of services sectors comprising information and communications, finance and insurance, and professional services expanded by 4.2 per cent year on year, quickening from the 3.6 per cent growth in Q4.

But sequentially, this group shrank by 4.2 per cent, reversing from the 4.4 per cent growth in the preceding quarter.