Lower prices of petroleum and chemical products again weighed down the value of wholesale trade - a major component of Singapore's services sector - in the first quarter.
Domestic wholesale trade slid 22.6 per cent in the three months to March, compared with the same period a year earlier, on the back of the lower prices, the Department of Statistics said yesterday. Excluding petroleum, the year-on-year decline was 11.4 per cent.
After adjusting for price changes over the past year, domestic wholesale trade inched down 1.7 per cent from a year earlier.
Foreign wholesale trade - a larger category that includes re-exports, offshore trade and transhipment cargo - fell 17.4 per cent in the quarter. Excluding petroleum, the drop was 13.2 per cent.
Stripping out price changes, foreign wholesale trade rose 4 per cent from a year earlier.
The ship chandlers and bunkering industry was hit the hardest in the first quarter, recording a 39.9 per cent drop in domestic sales. Without price changes, the drop would be 2.5 per cent.
The domestic sales of petroleum and petroleum products was not far behind, declining 38.2 per cent. However, things are looking bright for the household equipment and furniture industry, which expanded 12.5 per cent in the quarter.
The transport equipment industry grew 8 per cent, while the sales of food, beverages and tobacco inched up 1.4 per cent.
For foreign wholesale trade by industries, ship chandlers and bunkering also suffered the most, recording a 25.7 per cent decline.
Standard Chartered economist Jeff Ng said the figures reflect lower input prices, on the back of lower commodity or energy prices, for instance, and overcapacity.
This has affected sectors such as shipbuilding, and the prices of manufactured goods.
He said: "On one hand, it's beneficial as a lot of the producers are enjoying lower costs, but it also reflects the sluggish demand. But if prices start to rebound, things will start to bottom out by the end of the year as crude oil prices have been steadily increasing at the start of the year. The bad weather in the past few months has affected some of the food production as well."
There may be some ripple effects on the rest of the economy, where input prices rise, translating into higher prices for other products as well, he added.