Singapore services receipts up 14.7% in Q2

SINGAPORE’S services industries recorded a 14.7 per cent rise in business receipts on the year for the second quarter, according to the Department of Statistics (Singstat) on Friday (Aug 26). This marks an improvement from the 12.7 per cent year-on-year growth observed in the previous quarter.

On a quarter-on-quarter non-seasonally adjusted basis, business receipts were also up 4.9 per cent in Q2, recovering from a 1.8 per cent fall in Q1.

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

All of the services industries in the index saw year-on-year growth. In particular, the transportation and storage industry saw the largest increase at 40.9 per cent from the year-ago period.

The growth was mainly attributed to the increase of business activities in the air transport segment, on the back of the easing of global travel restrictions and the reopening of Singapore’s borders to vaccinated travellers.

Maybank economist Chua Hak Bin noted that the “sudden demand surge” for travel could also have lifted air fares in the face of limited capacity, lifting receipts for the industry.

The water transport segment also recorded strong revenue growth.

Also seeing a large year-on-year rise was the recreation and personal services industry, which expanded 34.4 per cent in Q2, due mainly to the gaming and attractions segment, which benefitted from the easing of Singapore’s Covid-19 safe management measures.

All other industries — information and communications, professional services, real estate, health and social services, finance and insurance, administrative and support services, and education — also saw higher business receipts.

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Domestic-oriented sectors such as events, hotels and meetings, incentives, conferences and exhibitions are most likely to benefit from further easing of restrictions, CIMB economist Song Seng Wun said.

However, he added that with rising costs, a “common theme” that will affect all industries’ performances will be their ability to pass on higher costs to customers.

On a quarter-on-quarter non-seasonally adjusted basis, the industries also made a strong showing in the second quarter. All services industries saw growth on the quarter, with the exception of the education industry, which declined by 5.1 per cent, due mainly to lower fees received from education institutes.

Maybank’s Chua speculated that the fall “could be due to some segments such as foreign students from China not returning to Singapore because of their stricter border controls”.

Seeing the most quarter-on-quarter increases were the recreation and personal services industry and the transportation storage industry, both of which recorded double-digit increases at 19.5 per cent and 12.4 per cent respectively.

The recreational and personal services industry’s jump in business receipts on the quarter followed the removal of restrictions on social gathering group sizes and operating capacities in attractions and sports facilities. The increase in transportation and storage business receipts from the previous quarter was mostly caused by strong growth in the water transport segment, supported by higher revenue of shipping companies which saw an increase in freight rates.