Closures overtook formations for the first time since the crisis.
More businesses closed up in Singapore than were formed in 2015, according to data released by the statistics department.
This marks the first time that business closures overtook new business formations since the Global Financial Crisis. HSBC economist Joseph Incalcaterra said that the phenomenon is a "relatively bearish" and "ominous" sign, signalling a further moderation in economic activity for the first half of 2016.
Although the services sector has been a key growth driver in recent quarters, Incalcaterra warned that a spate of unimpressive economic data and persistently weak business expectations for the industry indicate greater uncertainty in coming quarters.
“The sector has become a statistical “wild card” due to concerns over data measurement and strong upward revisions from advance readings. Despite seasonal adjustment, the trend over the past few years has been for a surge in services output in 2H – particularly in finance & insurance – followed by a moderation in 1H (the opposite has been true for manufacturing). With the manufacturing sector likely to remain in recession in 1Q, this dynamic points to risks of economy-wide technical recession,” said Incalcaterra.
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