The Singapore economy shrank 6.8 per cent in the last quarter of 2009 compared with the previous quarter as manufacturing output fell by more than 38 per cent. Quarter on quarter, it was the worst performance since the economy shrank 11.5 per cent in the first quarter of 2009 during the height of the recession.
The economy shrank 2.1 per cent over the year.
The Ministry of Trade and Industry said this morning:
On a seasonally adjusted quarter-on-quarter annualised basis, Singapore’s GDP contracted by 6.8 per cent in the fourth quarter due to a pull-back in the manufacturing sector. Compared to the fourth quarter of 2008, the economy grew by 3.5 per cent.
The 3.5 per cent growth compared with the fourth quarter of 2008 does not mean much, however, because the economy was in recession then. The recession was officially declared over in the second half of 2009. But now the fourth quarter figures show the economy has slowed down again after growing in the second and third quarters.
Manufacturing output was down by 38.4 per cent compared with the previous quarter, as this ministry chart shows. Manufacturing output had never been so low even during the height of the recession. Manufacturing accounts for about a quarter of the economy.
The fourth quarter plunge came after double-digit gains in the second and third quarters lifted the economy out of recession. Quarter on quarter, the economy grew 21.6 per cent in the second quarter and 14.9 per cent in the third quarter.
Two quarters of gains helped the economy grow 0.6 per cent in the third quarter of 2009 compared with the same period in 2008.
But the big dip in the last quarter of 2009 dragged the economy back into negative territory, with a 2.1 per cent drop in GDP for the year as a whole.
Prime Minister Lee Hsien Loong said earlier in his New Year message:
Our fourth quarter growth is 3.5%, although for the whole year our growth is still negative, at -2.1%.
The Ministry of Trade and Industry said:
The manufacturing sector contracted by 38.4 per cent on a seasonally-adjusted quarter-on-quarter annualised basis in the fourth quarter, a reversal from the 29.6 per cent expansion in the third quarter. This decline was mainly due to a contraction in the output of the biomedical manufacturing and transport engineering clusters. However, the electronics, chemicals and precision engineering clusters posted positive growth.
In contrast, the construction sector picked up moderately in the fourth quarter. The sector expanded by 4.3 per cent on a seasonally-adjusted quarter-on-quarter annualised basis in the fourth quarter compared to 0.9 per cent in the third quarter.
The services sector continued to grow, but at a more moderate pace. On a seasonally adjusted quarter-on-quarter annualised basis, growth eased to 7.2 per cent in the fourth quarter, down from 10.9 per cent in the third quarter. This was mainly due to a slowdown in wholesale & retail trade from its strong growth in the third quarter. Most of the other segments of the services sector continued to grow. For example, financial services saw increased commercial bank, foreign exchange trading and Asian Currency Unit (ACU) business.
The preliminary GDP estimates for the fourth quarter and for the whole of 2009, including performance by sectors, sources of growth, inflation, employment and productivity, will be released in February 2010 in the Economic Survey of Singapore.
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