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Growth of the Singapore economy
eased to 7.5% in 3Q04, from 12.5% in 2Q04. The growth momentum, on an
annualised quarter-on-quarter basis, declined by 3.0%, after the 11.9% rise in
2Q04.
See
Chart 1 |
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Sources of Growth |
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Total demand rose by 18.7% in 3Q04, compared with
a 22.5% gain in 2Q04. This reflected a slower growth of both external and
domestic demand.
See
Chart 2 |
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External demand grew by 21.4% in the quarter, down
from 25.8% in 2Q04, mainly on slowing electronics exports. Services exports
also grew slower in 3Q04, particularly in the travel and transportation
services sectors. |
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This largely reflected the post-SARS recovery of
activities in the year-ago period. The higher base effect also showed up in
the growth of domestic demand, which slowed to 10.3% in 3Q04 compared with
13.6% a quarter earlier. Apart from slower growth in private consumption, this
also reflected declining public sector |
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Sectoral Performance |
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With the exception of the construction sector, all
other major economic sectors registered positive growth in 3Q04. The pace of
growth of all sectors, however, has moderated from the second quarter (see
Annex). |
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THE MANUFACTURING SECTOR registered growth of
11.5% during 3Q04, moderating from the 20.7% growth in the previous quarter.
This slowdown was mainly due to lower-than-expected biomedical output.
See
Chart 3 |
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The electronics cluster, however, expanded at a
faster rate of 26.4%, following the 25.3% growth in 2Q04, on the back of
strong demand for semiconductors and computer peripherals. |
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Growth of output in the chemicals cluster also
accelerated to 11.1% in 3Q04, compared with the 5.9% gain recorded in 2Q04. |
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THE CONSTRUCTION SECTOR contracted further by
10.9% in 3Q04, following the 5.9% contraction in the quarter earlier.
See
Chart 4 |
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There was a weakening in both public and private
sector construction activities. Public sector certified payments declined by
15.1%, with all segments recording slower activity. |
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Similarly, private sector construction work also
receded by 13.1%, with declines in all but the institutional segment. Total
contracts awarded continued its downward slide, declining by 22.9%, following
the fall of 13.9% registered in 2Q04. |
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THE WHOLESALE AND RETAIL TRADE SECTOR expanded by
15.7% in 3Q04, easing from the 18.9% rate of growth in 2Q04.
See
Chart 5 |
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Entrepot trade remained robust, with non-oil
re-exports growing by 24.9%. Domestic trade moderated slightly, as growth of
retail sales eased to 10.1%, from a 14.1% increase in 2Q04. |
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Supported by continued strong sales of wearing
apparel and footwear, retail sales excluding motor vehicles increased by 7.7%,
after a 9.9% gain in the earlier quarter. |
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THE HOTELS AND RESTAURANTS SECTOR registered a
gain of 6.7% in output during 3Q04, compared to the strong 38.9% growth
recorded in 2Q04.
See
Chart 6 |
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The slower rate of growth mainly reflected the
post-SARS recovery of activities in 3Q03. Compared to 3Q02, however, the
sector registered a decline of 2.1%. This reflected lower revenue from cess-paying
establishments and the decline in hotel room rates from levels recorded in
3Q02. |
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Partly offsetting the impact of these factors,
visitor arrivals rose by 13.3%, compared to 3Q02, while the average occupancy
rate for gazetted hotels rose to 83.1 per cent, a 9.5 percentage-point
increase from 3Q02. Hotel room revenue also reached $248 million, a 1.8%
increase compared to the same period two years ago. |
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GROWTH IN THE TRANSPORT AND COMMUNICATIONS SECTOR
was also dampened by the higher base effect.
See
Chart 7 |
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In 3Q04, the sector grew by 8.9%, compared with
the 18.9% growth in the earlier quarter. The slowdown mainly reflected weaker
growth in the air transport segment. |
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Growth of the sea transport segment was little
changed and sea cargo handled grew by 17.1%, an improvement over the 13.9%
recorded in 2Q04. |
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The communications segment also continued its
expansion. During 3Q04, IDD call duration rose strongly, while mobile phone
and broadband subscriptions also registered gains. |
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THE FINANCIAL SERVICES SECTOR grew by 4.1% in
3Q04, moderating from 5.3% in the previous quarter. Several key segments of
the sector continued to expand in the third quarter.
See
Chart 8 |
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Trading activity in the foreign exchange market
remained robust and fund management activities continued to improve,
reflecting the strengthening of investor confidence. |
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The turnaround in insurance-related activities was
also sustained in 3Q04. In comparison, activity in the domestic stock market
remained lacklustre and banking activities were generally slower, due mainly
to weaker earnings from fees and commissions. |
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THE BUSINESS SERVICES SECTOR expanded by 2.2% in
3Q04, easing from the 3.5% gain in 2Q04.
See
Chart 9 |
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This was largely due to the slowing of growth in
the real estate segment, the largest segment in the sector. |
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However, the IT and related services segment
continued to grow strongly. Professional services – such as accounting and
legal services – also registered higher growth rates in 3Q04. |
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More..... |
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Source:
Ministry of Trade and Industry Press
Release 17 Nov 2004 |
Performance of the Singapore economy in 3rd quarter 2004
