Services sector grows faster in Q3

The numbers showed that all services industries reported growth, with information and communications showing the biggest improvement with a 13.6 per cent jump.
The numbers showed that all services industries reported growth, with information and communications showing the biggest improvement with a 13.6 per cent jump.PHOTO: ST FILE

Manufacturing has been the star performer this year, but a robust third quarter showed that the services sector is back in the game.

Revenue for firms in the sector rose at a faster pace in the three months to Sept 30 than the same period last year - a further sign that the recovery is extending across the wider economy.

Turnover was up 6.3 per cent in the quarter and up from year-on-year growth of 5 per cent in the second quarter, according to data from the Department of Statistics yesterday.

The numbers showed that all services industries reported growth, with information and communications showing the biggest improvement with a 13.6 per cent jump. This was followed by health and social services at 9.2 per cent and financial and insurance services at 7.4 per cent.

The growth trend seems to be holding up on a quarter-by-quarter basis as well.

Revenue went up 0.9 per cent from the second quarter to the third on a non-seasonally adjusted basis - a tick slower than the second quarter's 1 per cent growth over the previous three months.

Turnover in education services registered the highest growth at 11.2 per cent, followed by health and social services at 3 per cent.

Turnover was up 6.3 per cent in the quarter and up from year-on-year growth of 5 per cent in the second quarter, according to data from the Department of Statistics yesterday.

But lower revenues were recorded by transport and storage services, with the biggest decline of 1.7 per cent compared with the second quarter. Recreation and personal services fell 1.3 per cent, while business services dipped 0.5 per cent.

A string of positive economic data last week has led economists to believe that growth is becoming more broad-based as the services sector - which makes up two-thirds of the economy - sees a pick-up.

Manufacturing has been the force behind most of the growth this year, but services are likely to gain momentum next year due to an improved global economy and brightening business conditions, said economists.

DBS economist Irvin Seah said last week services could become the "main engine of growth in 2018" if improvements continue.

The Business Receipts Index for the services sector excludes wholesale and retail trade and accommodation and food services.

A version of this article appeared in the print edition of The Straits Times on November 28, 2017, with the headline 'Services sector grows faster in Q3'. Print Edition | Subscribe