Why analysts have dismal expectations for Singapore's 1Q13 GDP

Still stuck in ''contraction mode''.

According to DBS, there may be possible upsides to the first quarter GDP figures tomorrow morning but the outcome won’t be great either. 

The headline numbers will probably show an upward revision to -0.3% QoQ saar (-0.4% YoY), up from the previous advance estimates of -1.4% QoQ saar (-0.6% YoY).

Here's more from DBS:

But the point is that the economy is still stuck in contraction mode. Slightly stronger services and construction growth will probably be the main reasons for the revision although the risk is that the manufacturing growth may turn out slightly worse than expected.

Indeed, the growth performance in the manufacturing sector has been disappointing in the first two months of the year due to the festive season slump and an unexpected pullback in pharmaceutical production.

While production output did rebounded in March, the turnaround was weaker than anticipated.

An uncertain global outlook and sluggish external demand is probably at the heart of the below-par showing by this sector.

Yet, one also should not discount the strain on corporate earnings exerted by the restructuring effort, which has led to the sharp increase in business costs as well as decline in competitiveness.

Outlook for the manufacturing sector remains dicey although some signs of recovery in the electronics sector have been evident lately.