Economy slows to 0.4% growth in Q1
The recovery of international visitor arrivals propels growth in accommodation and IT sectors.
Singapore’s gross domestic product (GDP) grew by only 0.4% during the first three months of 2023, slowing from the 2.1% expansion in Q4 2022, according to the latest economic survey released by The Ministry of Trade and Industry.
Notably, the manufacturing sector shrank 5.6% year-on-year, worsening further from the 2.6% contraction reported in Q4 2022.
The weak performance of the sector came on the back of output declines across all clusters except for the transport engineering cluster, the MTI said.
In contrast, the construction sector expanded by 7.2% in Q1 compared to the same quarter in 2022, extending the 10% growth in Q4 2022. Both public and private sector construction output increased during the quarter, the MTI said.
The wholesale trade sector contracted 2.5% in Q1 compared to Q1 2022, reversing the 2.4% growth in Q4 2022. This was due to the machinery, and “others” segments contracting, which the fuels & chemicals segment’s growth couldn’t offset.
Travel recovery buoys select sectors’ growth
The accommodation sector expanded by 21.9%, accelerating from the 7.8% in Q4 2023. Strong recovery in international visitor arrivals– also due to the low base in Q1 2022– propelled its growth.
High sales of volumes at food caterers and restaurants push the food & beverage services sector to expand 12.2% in Q1 when compared to Q1 2022, extending the 19.6% growth from Q4 2022.
However, on a quarter-on-quarter seasonally adjusted basis, the sector contracted 0.5% in Q1 compared to Q4 2022.
The information & communications sector grew 6.1%.
“Within the sector, the IT & information services segment expanded robustly, supported by data hosting services and internet search engine activities. Similarly, the telecommunications segment expanded on the back of a rebound in demand for roaming and prepaid services in tandem with the recovery in international travel,” the MTI wrote.
Retail trade, transport, real estate grow at slow paces
The retail trade sector grew by 2.5% over the same period, extending the 5.1% growth in Q4 2022. An increase in non-motor vehicle sales volume contributed to the rise, although motor vehicle sales notably fell, the MTI said.
Growth in the transportation & storage sector slowed to 0.7% year-on-year, as the water transport segment shrank on the back of a decline in total sea cargo handled. This was offset by the air transport and land transport segments expanding.
The real estate sector also expanded by 9.2% during the quarter, slowing from the 15.2% growth in Q4 2022. The private residential property segment supported the sector’s overall growth. The commercial office and industrial space segments also grew.