Singapore services receipts growth slows for 5th straight quarter to 3.2% in Q3
SINGAPORE’S services industries posted a 3.2 per cent year-on-year rise in business receipts in Q3, easing from the revised 3.8 per cent increase in the preceding quarter, data from the Department of Statistics (Singstat) showed on Monday (Nov 27). The latest print marked the fifth consecutive quarter of slowing growth.
This reflects continued normalisation from a high base after reopening in 2022, said DBS economist Chua Han Teng.
Maybank economist Chua Hak Bin expects growth to stabilise at around the current rate in Q4, before recovering more meaningfully to about 5 per cent to 7 per cent in 2024.
On a non-seasonally adjusted quarterly basis, business receipts were up 1.9 per cent in Q3, extending the previous quarter’s 2.2 per cent expansion.
Singstat’s business receipts index excludes wholesale trade, retail trade, and accommodation and food services, which are tracked separately.
Almost all services industries in the index grew year on year and quarter on quarter, with a few exceptions.
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Recreation and personal services recorded the biggest year-on-year jump in takings, up 20.8 per cent, on the back of higher earnings of firms in the sports, gaming and attractions segments.
In this and other domestic services sectors, Maybank’s Chua said that revenue will continue to grow, but more moderately, as revenge spending in services fades.
Information and communications and finance and insurance also recorded double-digit growth.
Singstat said the increase in information and communications earnings was mainly due to higher business receipts across various segments, such as software development, IT consultancy, information services and online marketplaces.
Improved business sentiment in Singstat’s recent business expectations survey for October 2023 to March 2024, due to strong demand for data and cloud services, suggests that this outperformance could sustain in the coming months, added DBS’ Chua.
Maybank’s Chua noted that finance and insurance returned to positive growth in Q3, after nearly a year in contraction.
Receipts in the industry should grow more strongly in 2024, “especially in the second half when US interest rates start falling as the Fed starts trimming policy rates”, he said.
Transportation and storage, on the other hand, posted a 20.7 per cent year-on-year decline in the third quarter. In particular, the water transport segment posted a fall in revenue, due to lower freight rates in the shipping industry, Singstat said.
The lower takings are mainly due to price, rather than volume – DBS’ Chua noted that real output is still expanding year on year, albeit slower than in Q2; Maybank’s Chua also highlighted that shipping volumes are recovering.
“More visible signs of an export and trade recovery will help boost transport and storage services and trade financing,” Chua Hak Bin added.
Administrative and support services also recorded a fall on year, slipping 7 per cent.
Maybank’s Chua noted that real estate services growth was softer than in the previous quarter, which “was expected given rising mortgage rates and stricter housing measures, including the steep increase in additional stamp duties for foreign purchases”.
Sequentially, business receipts also rose most in recreation and personal services. This was mainly attributed to stronger business performance in the arts, entertainment and recreation segments.
It was followed by education, mainly due to an increase in fees received by higher education institutions.
In contrast, both transportation and storage as well as professional services registered drops in turnover on a non-seasonally adjusted quarter-on-quarter basis.
Singstat said the fall for professional services was due to firms engaged in accounting, auditing, head offices, architectural and engineering activities reporting lower revenue in the third quarter of this year.
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