Singapore's economy grew at faster pace of 2.7% in Q1 of 2024: Advance estimates

SINGAPORE: Singapore's economy grew 2.7 per cent year-on-year in the first quarter of 2024, according to advance estimates from the Ministry of Trade and Industry (MTI) on Friday (Apr 12).

This was faster than the 2.2 per cent growth recorded in the last quarter of 2023.

On a quarter-on-quarter seasonally adjusted basis, Singapore's economy expanded by 0.1 per cent, extending the 1.2 per cent expansion in the fourth quarter of 2023.

Advance gross domestic product estimates are computed largely from data gathered in the first two months of the quarter – January and February in this case.

They are intended as an early indicator of GDP growth for the quarter and are subject to revision when more comprehensive data is available, said MTI.

SECTOR PERFORMANCES

The manufacturing sector grew by 0.8 per cent year-on-year in the first quarter of 2024, moderating from the 1.4 per cent expansion in the previous quarter. 

"Within the sector, output expansions in the chemicals, precision engineering and transport engineering clusters more than offset output contractions in the electronics, biomedical manufacturing and general manufacturing clusters," said MTI.

On a quarter-on-quarter seasonally-adjusted basis, the sector shrank by 2.9 per cent in the first quarter, a reversal from the 4.5 per cent expansion in the fourth quarter of 2023.

Meanwhile, the construction sector expanded by 4.3 per cent year-on-year in the first quarter, extending the 5.2 per cent growth in the last quarter of 2023. 

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

On a quarter-on-quarter seasonally adjusted basis, the sector contracted by 1.7 per cent in the first quarter, a pullback from the 2.0 per cent expansion in the preceding quarter.

Among the services sectors, the wholesale and retail trade, and transportation and storage sectors collectively expanded by 2.7 per cent year-on-year in the first quarter, accelerating from the 1.0 per cent growth in the last quarter of 2023.

All sectors within the group expanded during the quarter. 

For the wholesale trade sector, growth was driven by machinery, equipment and supplies. It was also driven by a diverse range of products such as metals, household equipment, timber and construction materials. 

Meanwhile, growth in the transportation and storage sector was largely supported by the water and air transport segments.

On a quarter-on-quarter seasonally adjusted basis, the sectors in the group expanded by 1.4 per cent in the first quarter, a turnaround from the 0.7 per cent contraction in the fourth quarter of 2023.

The group of sectors comprising the information and communications, finance and insurance and professional services sectors grew by 4.2 per cent year-on-year in the first quarter, faster than the 3.6 per cent growth in the previous quarter.

All sectors within the group also expanded during the quarter.

"Growth in the information and communications sector was bolstered by continued strong demand for IT and digital solutions, while that in the professional services sector was mainly driven by the head offices and business representative offices segment," said MTI. 

"The finance and insurance sector expanded on account of the strong performance of the banking and activities auxiliary to financial services segments."

On a quarter-on-quarter seasonally adjusted basis, the sectors as a group shrank by 4.2 per cent in the first quarter, a reversal from the 4.4 per cent growth in the preceding quarter.

The remaining group of services such as accommodation and food services, real estate, administrative and support services, and other sectors, expanded at 2.9 per cent year-on-year in the first quarter of 2024. 

This was higher than the 2.0 per cent growth recorded in the fourth quarter of 2023.

All sectors within the group, except for the administrative and support services sector, expanded during the quarter.

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

On a quarter-on-quarter seasonally adjusted basis, the sectors in the group collectively expanded by 2.2 per cent in the first quarter, a turnaround from the 0.7 per cent contraction in the fourth quarter of 2023.

The preliminary GDP estimates for the first quarter of 2024, including performance by sectors, sources of growth, inflation, employment and productivity, will be released in the Economic Survey of Singapore in May.

IMPACT OF CONCERTS, OUTLOOK FOR THE REST OF 2024

OCBC's chief economist Selena Ling said the slew of concerts by Coldplay and Taylor Swift likely had a "temporal boost" to consumer-facing industries, namely hospitality and entertainment-related activities. 

Looking ahead, Ms Ling said Singapore's growth trajectory is tipped to strengthen for the upcoming quarters of 2024 on the basis of an improvement in the manufacturing recovery theme, especially for electronics. 

The financial sector could support growth too, as risk appetites could be buoyed by the global monetary policy easing cycle expected in the second half of the year.

Mr Barnabas Gan, acting group chief economist at RHB Bank, also sees Singapore's GDP growth accelerating further. RHB's forecast for GDP in the second quarter stands at 3.2 per cent.