Singapore has declared the recession over with the economy growing O.6 per cent between July and September compared with the same period last year, reports AFP, pointing out it's the first time the economy has grown year-on-year since the third quarter of 2008.
The government now expects the economy to grow by 3 to 5 per cent next year after shrinking 2 to 2.5 per cent this year because of the recession that began last October.
The recovery is tentative still. Not only is the growth less than the 0.8 per cent forecast in the advance estimates. The services sector is still in the doldrums.
The growth is largely due to construction and manufacturing — and one industry in particular, the biomedical sector, which expanded 64 per cent. Electronics and the rest are still down for lack of demand. Exports have not picked up yet.
But first the good news.
Manufacturing output grew by 6.6 per cent compared to the same quarter last year, and construction output rose by 13 per cent. Business services also grew by 2.6 per cent, says the Ministry of Trade and Industry.
Now begins the bad news — in the ministry's own words, from its full report for the third quarter.
The services producing industries fell 2.2 per cent, a moderation from the 4.9 per cent decline in the second quarter of 2009.
Employment
Employment grew by 15,400 in the third quarter of 2009, ending losses in the first and second quarters of 2009.
But the seasonally adjusted overall unemployment rate rose slightly to 3.4 per cent in September 2009 from 3.3 per cent in June 2009.
Among the resident labour force, the unemployment rate increased to 5.0 per cent in September 2009 from 4.6 per cent in June 2009.
An estimated 83,800 residents were unemployed in September 2009. The seasonally adjusted figure was 100,300.
Services employment rose by 13,400 while the construction sector continued to add workers (8,100). However, the manufacturing sector shed 6,600 jobs.
Productivity declined by 0.7 per cent in the third quarter of 2009 after falling 6 per cent in the second quarter.
Total exports continued to decline. Domestic exports declined at a slower 22 per cent, while re-exports registered an 18 per cent decrease following the
previous quarter’s 24 per cent decline.
Manufacturing and construction
The manufacturing sector expanded for the first time since the first quarter of 2008, largely due to continued strong performance in the biomedical manufacturing output. Most of the other manufacturing clusters, particularly electronics, contracted less sharply compared to the previous quarter.
The manufacturing sector expanded 6.6 per cent in the third quarter of 2009, compared to the 1.1 per cent contraction in the second quarter of 2009.
• The biomedical manufacturing cluster expanded 64 per cent.
• The electronics cluster contracted 4.4 per cent.
• The transport engineering cluster contracted 8.6 per cent due to lower level of activities in the marine and aerospace segments.
• Output of the chemicals cluster declined 5.4 per cent due to weak refining margins.
The construction sector grew by a slower 13 per cent in the third quarter, following the 19 per cent growth in the previous quarter.
Services
The wholesale and retail trade sector contracted by a smaller 8.8 per cent in the third quarter of 2009.
The hotels and restaurants sector contracted by 2.5 per cent in the third quarter. This was the slowest rate of decline since the start of 2009.
The wholesale and retail sector and the transport and storage sector declined by 8.8 per cent and 7.5 per cent respectively.
Professionals
The report has one bright spot for professionals.
There is growing overseas demand for the services of engineers, architects, accountants and lawyers in Singapore.
Exports of professional services have increased in recent years, says the report. It adds:
The professional services sector’s share of nominal GDP rose from 3.9 per cent in 2000 to 4.7 per cent in 2008. This level places the professional services sector roughly on par with major manufacturing clusters such as electronics (5.1 per cent) and biomedical manufacturing (4.3 per cent) in terms of contribution to the economy.
Employment and wages in the sector have also risen.
Related posts:
- Singapore recovery slowing: All sectors down except biomedicals
- Singapore GDP up, but almost all other indicators down
- Singapore GDP up but growth likely to slow down, says MAS
- Straits Times cherrypicks economic survey findings
- Singapore rapid recovery ending, wages, hirings down, slow growth next year: MAS
