Chart of the Day: Discover the three sources of Singapore’s slow economic growth

They are all keeping the economy at sub-1% GDP growth.

What’s pulling growth down? Some of it’s due to the economic restructuring under way, some of it’s due to weak global demand and some of it is due to weak domestic demand that follows from both.

This is according to a recent report by DBS which adds that restructuring has put a crimp into foreign labor supplies and raised domestic costs. In the short-term, the adjustments mean a drop in output. Longer-term, the hope is that restructuring pushes the economy towards more higher value-added output and higher incomes for all.
According to DBS, it appears to be working, painful though it is in the short-term. Median income growth has averaged 3.1% per year in real terms since 2010, far greater than in other developed economies over the same time frame.

In terms of economic structure, the easiest way to see the changes may be to look at total growth by sector in recent years. Since late-2010, when the economy began to run more ‘normally’ (i.e., the V-shaped recovery from the 2008 crisis had passed), growth in financial services, construction and information / comms has run between 18%-24%. Wholesale and retail trade have languished. Within the manufacturing sector, pharmaceuticals production has soared; ‘old fashioned’ chemicals production has languished, electronics production has shrunk by 23%.