Economic Survey of Singapore 2013 Economic Performance

MINISTRY OF TRADE AND INDUSTRY 1

CHAPTER 1
ECONOMIC PERFORMANCE
OVERVIEW
In the fourth quarter of 2013, the economy grew by 5.5 per cent, slightly lower than the 5.8 per
cent growth in the third quarter. Growth was largely supported by the healthy expansion of the
manufacturing, finance & insurance, as well as wholesale & retail trade sectors.
For the whole of 2013, the economy grew by 4.1 per cent, higher than the 1.9 per cent growth in 2012.
This was mainly due to strong growth in the services producing industries, particularly the finance &
insurance, as well as wholesale & retail trade sectors.
OVERALL PERFORMANCE
The economy grew by 5.5 per cent in the fourth
quarter of 2013, moderating from the 5.8 per cent
growth in the third quarter (Exhibit 1.1). On a
quarter-on-quarter seasonally-adjusted annualised
basis, the economy expanded by 6.1 per cent,
much faster than the 0.3 per cent increase in the
previous quarter.
The manufacturing sector grew by 7.0 per cent
in the fourth quarter, higher than the 5.3 per
cent growth in the preceding quarter. Growth
was supported by strong performances in the
electronics and transport engineering clusters. The
construction sector grew by 4.8 per cent, lower
than the 6.6 per cent growth in the preceding
quarter, due to a moderation in private sector
construction activities.
Services producing industries as a whole grew by
5.9 per cent, slower than the 6.3 per cent growth
in the previous quarter. Growth was led by the
finance & insurance sector, which expanded by 9.7
per cent, comparable to the 10 per cent recorded
in the preceding quarter. The wholesale & retail
trade sector grew by 7.3 per cent, extending the
6.3 per cent growth in the preceding quarter.
Among the services industries, the slowest growth
was clocked in the accommodation & food services
sector, at 2.2 per cent, lower than the 3.6 per cent
gain in the preceding quarter. The other services
industries expanded by 2.4 per cent, moderating
from the 4.5 per cent growth in the preceding
2.2
2.4
4.6
4.8
4.8
5.0
5.5
7.0
7.3
9.7
0 2 4 6 8 10 12
Finance & Insurance
Wholesale & Retail Trade
Manufacturing
Overall GDP Growth
Information & Comms
Construction
Transportation & Storage
Business Services
Other Services
Accommodation & Food
Per Cent
Exhibit 1.1: GDP and Sectoral Growth Rates
in 4Q 2013
Economic Survey of Singapore 2013 Economic Performance
2 MINISTRY OF TRADE AND INDUSTRY
quarter. For the whole of 2013, the economy grew
by 4.1 per cent, an improvement over the 1.9 per
cent growth in 2012 (Exhibit 1.2). Growth in the
manufacturing sector improved from 0.3 per cent
in 2012 to 1.7 per cent in 2013, on the back of
strong growth in the electronics and transport
engineering clusters. By contrast, growth in the
construction sector moderated to 5.9 per cent,
from 8.6 per cent in 2012.
Growth in the services producing industries picked
up to 5.3 per cent in 2013, from 2.0 per cent in
2012. This was mainly due to stronger growth in
the finance & insurance and wholesale & retail
trade sectors. The finance & insurance sector
grew by 11 per cent, up from 1.3 per cent in the
previous year. The wholesale & retail trade sector
expanded by 5.0 per cent, after declining by 1.4
per cent the year before.
Contribution to Growth
In the fourth quarter of 2013, the manufacturing,
finance & insurance, and wholesale & retail
sectors collectively accounted for over half of
overall growth (Exhibit 1.3). The transportation
& storage, other services industries, construction,
and information & communication sectors also
contributed positively to growth in the fourth
quarter.
For the whole of 2013, all sectors contributed
positively to growth (Exhibit 1.4). Finance &
insurance was the largest contributor (1.2
percentage-points), followed by wholesale &
retail trade (0.8 percentage-points) and business
services (0.6 percentage-points).
Exhibit 1.2: GDP and Sectoral Growth Rates
in 2013
1.7
1.9
3.0
3.0
4.1
5.0
5.1
5.5
5.9
10.6
-2 0 2 4 6 8 10 12
Finance & Insurance
Construction
Information & Comms
Business Services
Wholesale & Retail Trade
Overall GDP Growth
Transportation & Storage
Accommodation & Food
Other Services
Manufacturing
Per Cent
0.2
0.2
0.2
0.4
0.6
1.2
1.2
1.8
5.5
0 1 2 3 4 5 6
Overall GDP Growth
Manufacturing
Finance & Insurance
Wholesale & Retail Trade
Business Services
Transportation & Storage
Other Services
Construction
Information & Comms
Accommodation & Food
Per Cent
Exhibit 1.3: Percentage-Point Contribution to
Growth in Real GDP in 4Q 2013 (By Industry)
0.1
0.2
0.2
0.2
0.3
0.4
0.6
0.8
1.2
4.1
0 1 2 3 4 5
Overall GDP Growth
Finance & Insurance
Wholesale & Retail Trade
Business Services
Manufacturing
Transportation & Storage
Construction
Information & Comms
Other Services
Accommodation & Food
Per Cent
Exhibit 1.4: Percentage-Point Contribution to
Growth in Real GDP in 2013 (By Industry)
Economic Survey of Singapore 2013 Economic Performance
MINISTRY OF TRADE AND INDUSTRY 3
SOURCES OF GROWTH
Total demand rose by 3.6 per cent in the fourth
quarter of 2013, lower than the 6.3 per cent
increase in the preceding quarter (Exhibit 1.5).
Total demand growth in the fourth quarter was
supported by external demand, but weighed
down by domestic demand. Specifically, domestic
demand contributed negatively to total demand
growth (-0.9 percentage-points). The decline in
domestic demand was largely driven by a fall in
inventories. External demand, on the other hand,
continued to provide support to total demand
growth (4.5 percentage-points).
For the whole of 2013, growth in total demand
was 3.1 per cent, similar to the pace of growth in
2012. External demand was the key contributor
to total demand growth, accounting for 2.7
percentage-points, or almost 90 per cent, of the
increase.
External Demand
External demand grew by 6.1 per cent in the
fourth quarter of 2013, following the 6.5 per cent
increase in the preceding quarter (Exhibit 1.6).
For the whole of 2013, external demand grew at
a faster pace of 3.6 per cent, compared to the
1.4 per cent growth in 2012. This was supported
mainly by growth in the exports of machinery &
transport equipment, miscellaneous manufactures,
and transport services.
Domestic Demand
Total domestic demand declined by 3.6 per cent
in the fourth quarter of 2013, a reversal from the
5.6 per cent increase in the preceding quarter.
The negative growth in inventories was the
key contributor to the decline in total domestic
demand.
For 2013 as a whole, total domestic demand rose
by a modest 1.7 per cent, following the 8.6 per
cent increase in 2012. The slower growth in total
domestic demand was primarily due to the decline
in gross fixed capital formation (GFCF).
Exhibit 1.5: Percentage-Point Contribution to
Total Demand Growth
2012
2013
2013 II III IV
Total Demand 3.1 3.5 6.3 3.6 3.1
External
Demand 1.1 3.5 5.0 4.5 2.7
Total Domestic
Demand 2.0 0.0 1.3 -0.9 0.4
Consumption
Expenditure 0.4 0.6 0.6 0.6 0.7
Public -0.1 0.2 0.2 0.4 0.3
Private 0.5 0.4 0.3 0.2 0.3
Gross Fixed
Capital
Formation 0.7 -0.2 0.4 -0.5 -0.2
Changes in
Inventories 0.9 -0.4 0.4 -1.0 0.0
-5
0
5
10
15
IV I
2013
II III IV
Per Cent
Exhibit 1.6: Changes in Total Demand at
2005 Market Prices
Total
Domestic
2012
External
Economic Survey of Singapore 2013 Economic Performance
4 MINISTRY OF TRADE AND INDUSTRY
Consumption Expenditure
Total consumption expenditure increased by 4.2
per cent in the fourth quarter of 2013, following
the 3.7 per cent increase in the preceding quarter.
For the full year, total consumption expenditure
grew by 4.4 per cent, faster than the 2.8 per cent
growth in 2012. Public consumption expenditure
increased by 11 per cent, a strong rebound
from the 1.9 per cent decline in 2012. Private
consumption expenditure recorded gains of 2.7 per
cent, moderating from the 4.1 per cent increase
in the preceding year.
Gross Fixed Capital Formation
GFCF fell by 6.3 per cent in the fourth quarter of
2013, a reversal from the expansion of 4.4 per
cent in the preceding quarter.
For the whole of 2013, GFCF declined by 2.6 per
cent, compared to the growth of 8.7 per cent
in the preceding year (Exhibit 1.7). The decline
was largely due to lower spending on transport
equipment and machinery, equipment & software,
which more than offset the increase in spending
on construction & works (Exhibit 1.8).
NATIONAL SAVING
Singapores nominal GDP amounted to $370 billion
in 2013, an increase of 4.2 per cent over 2012. As
factor income outflows exceeded inflows by $8.7
billion, the Gross National Income (GNI) was $361
billion. This was higher than the $347 billion in
2012. Gross National Savings (GNS) grew by 3.5
per cent to $165 billion in 2013. This comprised a
net $68 billion lent or transferred abroad and $97
billion in Gross Capital Formation. The national
savings rate was 46 per cent, unchanged from the
preceding year.
Exhibit 1.7: Annual Changes in Gross Fixed
Capital Formation at 2005 Market Prices, 2013
Total Public Private
TOTAL -2.6 -0.5 -3.1
Construction &
Works 5.3 0.3 7.4
Transport
Equipment -26.9 74.7 -28.0
Machinery,
Equipment
& Software -5.2 -12.6 -4.8
Exhibit 1.8: Percentage Distribution of Gross
Fixed Capital Formation at Current Market
Prices, 2013
Total Public Private
TOTAL 100.0 17.2 82.8
Construction &
Works 63.4 15.8 47.6
Transport
Equipment 8.6 0.2 8.4
Machinery,
Equipment
& Software 28.0 1.3 26.8
Economic Survey of Singapore 2013 Economic Performance
MINISTRY OF TRADE AND INDUSTRY 5
GNI AND THE EXTERNAL
ECONOMY
Factor income from abroad reached $81 billion in
2013, up from $80 billion in 2012. The contribution
of overseas operations to the total economy
was 18 per cent in 2013, similar to that in 2012
(Exhibit 1.9), as total income grew at broadly the
same pace as factor income from abroad.
Based on the Survey of Singapores Investment
Abroad, the stock of direct investment abroad
increased from $447 billion in 2011 to $460 billion
in 2012.
0
5
10
15
20
25
30
87 89 91 93 95 97 99 01 03 05 07 09 11 13
Per Cent
Exhibit 1.9: Singapores Earnings from External
Economy as Proportion of Total Income
Factor Income From Abroad (FIFA)
GDP + FIFA