Q1 GDP could be revised upward: OCBC

It is increasingly likely to be revised up to 1.9% yoy but future quarter forecasts remain subdued at a 1-3% yoy range.

Here's more from OCBC:

We are expecting Q1 GDP to be revised up to 1.9% yoy and +11% qoq saar – the latter will likely mark the first double-digit qoq expansion since Q1 2011. Although this upward revision in the Q1 GDP estimates is likely to be welcome news for Singapore, the timing amidst the looming Greek political uncertainties and renewed stress in the peripheral Eurozone countries make it less likely to be accompanied by also an upward revision in the official growth forecast from the current 1-3% yoy.

Manufacturing momentum may remain on tenterhooks. The external demand situation is still dovish given the ongoing fiscal contraction story in Europe and disappointing April economic data for China which suggest Q2 growth could undershoot the 8% handle.

Singapore’s headline manufacturing PMI also slipped back after two months of expansion territory to contraction territory of 49.7 in April. The business expectations survey for Apr – Sep showed that the sectors that have turned less upbeat are the transport engineering (from 55% to 4%), and the biomedical manufacturing (from 10% to 6%). 

While the recovery in the electronics is likely to be sustained in the near-term, but will be relatively a modest one. The pick-up in business sentiments from a net 14% to 30% was led by semiconductors. Note the semiconductor book-to-bill ratio has improved to 1.13 in March, compared to just 0.71 in September 2011, this is still some distance from the high of 1.23 seen in July 2010. 

We expect a modest recovery in the manufacturing growth for the rest of 2012, but financial and tourism-related services industries will likely continue to be the growth drivers for this year, especially from the employment angle.