Singapore services receipts growth slows for 4th straight quarter to 3.9% in Q2
SINGAPORE’S services industries recorded a 3.9 per cent year-on-year rise in business receipts in the second quarter, easing from the revised 7.7 per cent growth in the preceding quarter, data from the Department of Statistics (Singstat) showed on Friday (Aug 25). This marked the fourth consecutive quarter of slowing growth.
On a non-seasonally adjusted quarterly basis, business receipts were up 2.4 per cent in Q2, reversing from the previous quarter’s 4.6 per cent contraction. Singstat’s business receipts index excludes wholesale trade, retail trade, and accommodation and food services, which are tracked separately.
Though growth has slowed in Q2 2023 compared to preceding quarters, it is important to note the higher year-ago base, said independent economist Song Seng Wun. Singapore’s economy had been opening up last year, with the services sector benefitting earlier from more in-person activity, he noted.
Most services industries in the index grew year on year and quarter on quarter, with a few exceptions.
The transportation and storage industry, which posted a 16.8 per cent drop in receipts on year, stood out as one of the reasons for services receipts’ easing year-on-year growth, said DBS economist Chua Han Teng. He added that revenues experienced a deeper year-on-year decline in Q2. In the first quarter, they had sunk 5.6 per cent.
“Even though real output in the transport and storage segment picked up in Q2 2023, the revenue decline was likely due to lower freight rates as global supply chain bottlenecks were being resolved,” he noted.
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Song said that transportation and storage services are “intertwined with manufacturing”. An easing-off in goods demand has been reflected in the demand slowdown for shipping, he said, though he added that air travel demand remains strong.
Administrative and support services was the only other industry that observed a year-on-year decline in Q2.
Chua also highlighted normalisation in information and communications – due to fading strong pandemic gains from increased digitalisation – and professional services – which had benefitted from the post-pandemic reopening.
Recreation and personal services marked the biggest year-on-year jump in takings, up 19.6 per cent. This came on the back of higher earnings of firms in the gaming and attractions segment, which pulled in more business activities in Q2. The finance and insurance industry, as well as the real estate industry, also recorded double-digit growth. Real estate’s increase was due mainly to real estate developers reporting higher turnover.
On a quarterly basis, business receipts rose most for the information and communications industry. “Firms engaged in software publishing (which includes games publishing), and information service activities such as Internet search engines were among those which saw increases in revenue,” Singstat said.
It was followed by professional services, where firms engaged in legal, accounting and auditing, head office and business and management consultancy activities were among those that reported higher sales. In contrast, the education industry registered a drop in turnover, due to lower fees received by higher education institutions. Transportation and storage similarly marked a dip.
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