Singapore GDP growth slows to 3.2% in 2018

Growth in the manufacturing sector decelerated to 7.2% from 10.4%.

Singapore’s GDP growth slowed to 3.2% for the whole of 2018 from 3.9% in 2017 as the manufacturing sector took a beating from the protracted trade dispute, according to data from the Ministry of Trade and Industry.

In Q4, the economy grew by 1.9% which represents a slowdown from 2.4% expansion in the previous quarter.

Also read: Service and manufacturing outlooks worsen for Q4 amidst global trade tensions

The construction sector shrank 3.4% in 2018 which represents a more gradual pace of decline from the double-digit 10.2% decrease in 2017 as less public sector construction works hit sector output. On the other hand, the service producing industries rose 3% although slightly lower than the 3.2% growth in 2017 on the back of gains from the finance and insurance, business services and wholesale and retail trade sectors. 

Growth in the manufacturing sector fell to 7.2% YoY in 2018 from 10.4% amidst weakening demand for semiconductors which account for 62% of sector production.

Also read: Tariff war footprint tramples beyond Singapore's manufacturing

The MTI flagged heightened macroeconomic uncertainties brought about by the trade war, slowdown in Chinese economy and no-deal Brexit which is set to hit Singapore’s economic growth engines.

“The manufacturing sector is likely to see a significant moderation in growth following two years of robust expansions. In particular, the electronics and precision engineering clusters are expected to face external headwinds due to weakening global demand for semiconductors and semiconductor equipment with the fading of the global electronics cycle,” the agency said in a statement.

Outward-oriented service sectors like wholesale trade, transportation & storage and finance & insurance is also tipped to weaken over the coming months.

Resilient sectors include the information & communications sector and the education, health & social services segment. The construction sector is also tipped to see a turnaround following three consecutive years of contraction.

The MTI forecasts full-year GDP growth at 1.5-3.5% for 2019.