Weak manufacturing sector drags down economy

The sector contracted by 1.5% in Q4.

The Ministry of Trade and Industry reported:

Based on advance estimates, the Singapore economy grew at a modest pace of 1.1 per cent on a year-on-year basis in the fourth quarter of 2012, an improvement from the flat growth in the previous quarter.

On a quarter-on-quarter seasonally-adjusted annualised basis, the economy grew by 1.8 per cent, an upturn from the contraction of 6.3 per cent in the preceding quarter.

For the whole of 2012, the economy is estimated to have grown by 1.2 per cent. This is slightly lower than MTI’s growth forecast of around 1.5 per cent, as the weakness in the manufacturing sector continued to weigh down on the economy.

On a year-on-year basis, the manufacturing sector contracted by 1.5 per cent in the fourth quarter, following the 1.6 per cent decline in the preceding quarter.

On a quarter-on-quarter basis, the sector contracted by an annualized rate of 10.8 per cent, extending the 9.9 per cent decline in the previous quarter. This largely reflected the continued weakness in the output of the electronics cluster.

The construction sector grew by 5.9 per cent on a year-on-year basis, moderating from the 7.7 per cent growth in the preceding quarter.

On a quarter-on-quarter basis, the sector contracted by an annualised rate of 8.9 per cent, mainly due to the decline in private sector building activities.

The services producing industries grew by 1.5 per cent on a year-on-year basis, up from the growth of 0.2 per cent in the previous quarter.

On a quarter-on-quarter basis, the services producing industries grew by an annualised rate of 7.0 per cent, reversing the 3.9 per cent contraction in the preceding quarter. This was largely due to the rebound in the wholesale & retail trade, finance & insurance sectors, as well as other services industries.

MTI will release the preliminary GDP estimates for the fourth quarter and the whole of 2012 in February 2013, including performance by sectors, sources of growth, inflation, employment and productivity, in its Economic Survey of Singapore.