Singapore’s GDP growth continues to pose weakness in 1Q15

Way slower than a 4.9% expansion in 4Q14.

GDP growth is expected to have slowed in 1Q15. However, the economy will narrowly avert a contraction in 1Q15.

According to a report by DBS, the advance GDP figures due tomorrow morning will likely show that the economy has expanded marginally by 0.5% QoQ saar. That’s weak growth by Singapore’s standard and way slower than a 4.9% expansion in 4Q14. On a year-on-year basis, headline growth will likely report 1.85 YoY, down from 2.1% in the previous quarter.

DBS adds that the key manufacturing sector will be the main drag. With four consecutive months of below 50 readings in the PMI and an equally dismal industrial production output growth of -1.2% YoY on average between Jan-Feb, outlook for this sector looks bleak. A contraction in manufacturing growth is almost a given.

Here’s more from DBS:

Services sector will be the main pillar of growth but specific industry showings will be mixed. Performance of some externally oriented services industries will not be good amid weak global demand. This is particularly the case with industries such as wholesale trade and transportation services. However, financial services will remain the outlier, with double digit growth powered essentially by healthy trading volume. Overall, services sector growth will remain more or less unchanged from the previous quarter, at about 3% YoY.