Singapore’s Ministry of Trade and Industry has just published an economic survey of Singapore for the first quarter of 2018 as illustrated by the figure below.

Real GDP grew by 4.4% for Q1 2018 with Manufacturing and Finance & Insurance sectors leading and contributing close to 68% of the GDP growth.

Earlier back in May 2018, the ministry said that it expected Singapore GDP growth to be in the range of 2.5 to 3.5% in 2018, revised upwards from 1.5% to 3.5% as previously announced. Resident (Singaporean and PR) unemployment rate were 2.8% in the first quarter of 2018 and although the rate fell, the sectors which saw the highest employment rate were confined mainly to Other services industries, Financial & Insurance services and ICT. Merchandise exports rose by 2.3% y-o-y while Services exports rose by 6.1% y-o-y.

Unemployment

Total unemployment increase by 1200 quarter-on-quarter while year-on-year, the employment declined by 2100 with the contraction mainly due to reduced work permit holders in construction and marine shipyard sectors. In March 2018, an estimated 64800 residents (of which 57900 is Singapore citizens) were unemployed, which was lower than that in December 2017 with a figure of 68,500 residents (of which 58,600 is Singapore citizens).

Manufacturing sectors saw a decline in employment for the 14th consecutive quarter as weak demand for oil rigs continue to weigh on employment in marine shipyard sector. Employment in construction sector also saw a decline for the 7th consecutive quarter in tandem with continuous weaknesses in construction activities.

While in general, all sectors were growing, the only exception was the construction sector which saw a decline of 5% due to weaknesses in public and private sector construction activities weighed down by lower investment spending on both public and private construction and works and transport equipment.

Hiring expectations according to Singapore EDB Business Expectation Survey, revealed a statistic that saw the manufacturing sector expected to hire fewer workers in 2nd quarter of 2018 compared with 1st quarter of 2018 due to weak hiring sentiment in the marine & offshore engineering segment. In contrast, the DOS Business Expectation Survey for the services sector saw that the services sector expected to increase hiring in the 2nd quarter of 2018 compared with 1st quarter of 2018 which include financial & insurance services and business services sector.

Consumer Price Index (CPI)

CPI rose by 0.2% y-o-y for 1Q 2018,  down from 0.5% q-o-q basis with food as the largest single contributor followed by increased fees in Kindergarten & childcare centers, commercial institutions and universities & polytechnics. Healthcare costs contribute too due to more expensive hospital and outpatient services. Transport cost edged up due to higher petrol price and higher bus and MRT fares.

International Trade

Merchandise Trades

Total merchandise exports rose by 2.3 per cent in the first quarter, following the 6.6 per cent increase in the preceding quarter. This marked the sixth consecutive quarter of growth, and was supported by increases in both domestic exports (3.5 per cent) and re-exports (1.0 per cent). The increase in domestic exports was due to a rise in both oil and non-oil domestic exports. In particular, oil domestic exports grew by 8.6 per cent, supported by higher oil prices compared to levels observed a year ago. In volume terms, oil domestic exports declined by 1.5 per cent.

Non-oil domestic exports (NODX) grew by 1.1 per cent in the first quarter, a moderation from the 10 per cent growth in the previous quarter. Growth in NODX was driven by an increase in non-electronics NODX which outweighed the decline in electronics NODX. Total merchandise imports rose by 2.8 per cent in the first quarter, easing from the 9.1 per cent increase in the previous quarter. Both oil and non-oil merchandise imports expanded. Specifically, oil imports increased by 3.7 per cent on the back of higher oil prices. Meanwhile, non-oil imports rose by 2.6 per cent, driven by an increase in both electronics and non-electronics imports.

Services Trades

Total services trade expanded by 4.7 per cent year-on-year in the first quarter, picking up from the 4.1 per cent growth in the previous quarter. Services exports grew by 6.1 per cent, up from the 3.2 per cent growth in the fourth quarter of last year. The increase in services exports was largely attributable to a rise in financial and transport services exports, as well as receipts from charges for the use of intellectual property. Meanwhile, services imports grew by 3.4 per cent, easing from the 5.0 per cent increase in the previous quarter. The growth in services imports was mainly due to increases in the imports of other business services, as well as insurance and transport services.

Singapore Current Account

Singapore current account surplus rose to $21 Billion in the first quarter, up from $18 Billion in the previous quarter. This was due to an increase in good surplus as well as smaller deficits in the services, primary income and secondary income balances.

Singapore Capital and Financial Account

Net outflows from the capital and financial account rose to $14 billion in the first quarter, from $11 billion a quarter before. Net inflows of direct investment fell and net outflows of other investment increased, outweighing the reduction in net outflows of portfolio investment and the reversal in financial derivatives from net outflows to net inflows.

Net inflows of direct investment fell by $1.5 billion to $11 billion in the first quarter, as foreign direct investment into Singapore declined by more than the decline in residents’ direct investment abroad. At the same time, net outflows from the “other investment” account rose by $18 billion to $24 billion in the first quarter. This largely reflected the reversal from a net inflow to a net outflow position by deposit-taking corporations.

In comparison, net outflows of portfolio investment decreased by $9.9 billion to $6.2 billion in the first quarter. This was mainly due to a switch by domestic deposit-taking corporations from net purchases of overseas securities to net sales. Meanwhile, financial derivatives turned from net outflows of $1.3 billion in the fourth quarter of last year to net inflows of $4.6 billion in the first quarter.

Singapore Economic Sentiments

According to Singapore Ministry of Trade & Industry, the local sentiment was higher in 2017 driven mainly by topics such as digital transformation, employment-support schemes and external cooperation and linkages. On the other hand, topics such as protectionism and trade wars were key laggards.

EditorBanking & FinanceLatest ThinkingRisk ManagementSingapore's Ministry of Trade and Industry has just published an economic survey of Singapore for the first quarter of 2018 as illustrated by the figure below. Real GDP grew by 4.4% for Q1 2018 with Manufacturing and Finance & Insurance sectors leading and contributing close to 68% of the GDP...