S'pore beats forecasts with 2.6% growth
THE economy grew a better-than-expected 2.6 per cent in the first three months of the year, thanks to the robust services sector helping to offset lacklustre manufacturing.
The numbers out yesterday were revised upwards from earlier official estimates of 2.1 per cent growth. They also beat economists' expectations of a 2.2 per cent expansion.
While the growth numbers were positive, labour productivity declined 0.6 per cent in the first three months, compared with the same period a year ago.
This comes after a fall of 1.5 per cent in the preceding quarter and made this the fourth straight quarter of decline.
The Ministry of Trade and Industry (MTI) said a stronger-than-expected showing in the services sector underpinned economic growth in the first quarter.
Services-producing industries expanded 3.8 per cent - faster than the 3.1 per cent in official advance estimates - largely propelled by the finance and insurance, wholesale and retail trade clusters.
Advance estimates are based largely on data from the first two months in the quarter.
Manufacturing had the weakest performance in the first quarter, down 2.7 per cent over the same period last year.
Capital Economics' senior Asia economist Daniel Martin said prospects for the highly export-dependent manufacturing sector will, in large part, rest on whether the global economy can get over its soft patch.
He added that this year "still looks set to be another year of pedestrian global growth", which dampens hopes of a strong recovery in Singapore's exports.
Still, the data hints at modest signs of a pick-up. Non-oil domestic exports expanded 4.8 per cent in the first quarter, the best effort in three years, thanks to increases in electronics and non-electronics shipments.
Companies in most sectors, except retail trade, also continue to express strong intentions to hire more workers, said MTI economics division director Yong Yik Wei at a briefing yesterday.
While the pace of jobs growth across the economy slowed significantly in the first quarter, overall unemployment remains at historically low levels and redundancies declined across all major sectors, she added.
Separately, in what Credit Suisse economist Michael Wan described as a "roller-coaster ride of data surprises", last month's manufacturing output declined by 8.7 per cent year-on-year, more than the 3.6 per cent dip economists had expected.
The numbers prompted some economists to suggest that second-quarter economic growth is likely to remain tepid.