Singapore’s gross domestic product expanded 1.3 percent on year in the first three months of 2021, the Ministry of Trade and Industry said on Tuesday.
That exceeded expectations for an increase of 0.9 percent following the 2.4 percent contraction in the fourth quarter of 2020.
On a seasonally adjusted quarterly basis, GDP rose 3.1 percent after climbing 3.8 percent in the three months prior.
Upon the release of the data, the MTI maintained its GDP growth forecast for 2021 at 4.0 to 6.0 percent.
The performance of the Singapore economy in Q1 was stronger than expected. The MTI said. While the recent tightening of domestic restrictions and border controls represents a setback to segments of the economy, the broader economy should still see a recovery this year in tandem with the global economic rebound and further progress in the domestic vaccination program.
The manufacturing sector expanded 10.7 percent on year, up from 10.3 percent in the previous quarter. Growth was due to output expansions in the electronics, precision engineering and chemicals clusters, which outweighed output declines in the transport engineering, general manufacturing and biomedical manufacturing clusters. On quarter, the manufacturing sector grew 10.8 percent, rebounding from the 1.4 percent contraction in the preceding quarter.
The construction sector contracted 22.7 percent on year, improving from the 27.4 percent contraction in the previous quarter. The performance of the sector was weighed down by declines in both public and private sector construction works. On quarter, the sector grew 5.0 percent, extending the 55.6 percent expansion in the fourth quarter.
The wholesale trade sector expanded 3.5 percent on year, faster than the 1.8 percent growth in the previous quarter. Growth was supported by an expansion in the machinery, equipment & supplies segment, which came on the back of the strong wholesale sales of telecommunications equipment & computers in tandem with the robust performance of Singapore’s electronics exports. On quarter, the sector’s growth slowed to 1.2 percent from the 5.2 percent in the fourth quarter.
The retail trade sector grew 1.4 percent on year, a reversal from the 4.7 percent contraction in the preceding quarter. Growth was supported by higher motor vehicular and non-motor vehicular sales volumes, partly due to low base effects from last year when sales were dampened by the introduction of safe distancing measures. On quarter, the sector expanded 0.9 percent, similar to the 0.8 percent growth in the previous quarter.
The transportation & storage sector shrank 16.5 percent on year, extending the 27.4 percent drop in the fourth quarter. Within the sector, the air transport segment contracted on the back of a sustained plunge in air passengers handled amidst ongoing international and domestic travel restrictions. Similarly, the water transport segment shrank on account of a decline in total sea cargo handled. On quarter, the transportation & storage sector grew 5.7 per cent, better than the 3.4 percent expansion in the previous quarter.
The accommodation sector expanded 19.0 percent on year, a turnaround from the 19.7 percent contraction in the preceding quarter. The strong growth seen in the sector was largely due to low base effects as international visitor arrivals had started to plunge in the first quarter of 2020 due to the tightening of border controls, although government and domestic tourism demand also provided some support. On quarter, the sector shrank 11.6 percent, reversing the 2.3 percent growth in the previous quarter.
The food & beverage services sector contracted 9.4 percent on year, improving from the 19.0 percent contraction in the previous quarter. All segments within the sector saw a decline in sales volume. Food caterers continued to be badly affected by restrictions on large-scale events and gatherings. Other segments such as restaurants were weighed down by capacity constraints arising from safe distancing measures, as well as the continued slump in visitor arrivals. On quarter, the sector was flat, a slowdown from the 6.7 percent expansion in the fourth quarter.
Growth of the information & communications sector accelerated to 6.4 percent on year from 2.6 percent in the previous quarter. The sector’s strong performance was driven by the IT & information services and other segments, which came on the back of robust enterprise and consumer demand for digital solutions and services, as well as games & software publishing activities respectively. On quarter, the sector shrank 1.1 percent, a reversal from the 4.2 percent expansion in the preceding quarter.
The finance & insurance sector grew 4.7 percent on year, extending the 4.9 percent expansion in the previous quarter. Growth was mainly supported by the banking segment, which expanded on account of a pickup in credit intermediation activities. At the same time, the fund management, insurance and activities auxiliary to financial services segments also posted healthy growth. On quarter, the sector expanded 1.4 percent, moderating from 3.8 percent growth in the fourth quarter.
The real estate sector shrank 3.9 percent on year, easing from the 10.8 percent contraction in the previous quarter. The weak performance of the sector was largely due to a decline in commercial office and retail space rentals. On quarter, the sector slowed to 5.6 percent from 8.8 percent in the preceding quarter.