SINGAPORE - Businesses in Singapore's services industries saw a drop in sales for the first quarter of this year before circuit breaker measures were imposed, with recreation and personal services taking the biggest hit.
Business receipts fell 1.1 per cent year on year for January to March period, down from the 4.6 per cent growth recorded in the fourth quarter of last year, according to data released by the Department of Statistics (Singstat) on Wednesday (May 27).
Performance was largely mixed across industries. The data excludes wholesale and retail trade and accommodation and food services.
The recreation and personal services industry reported a drop of 24.1 per cent in revenue, due mainly to firms in the attractions segment.
Companies in this industry include those in the arts and entertainment, as well as hairdressers, beauticians, fitness gyms and retailers of household goods.
Transport and storage services takings declined by 4.7 per cent. In particular, the air transport segment reported a decrease in revenue due to global travel restrictions as a result of the Covid-19 pandemic.
Maybank Kim Eng senior economist Chua Hak Bin said that the outlook for the recreation and personal services industries was likely to stay weak for the coming quarter as well, and possibly for an extended period, given that most of these services are considered non-essential and would only be able to resume operations in the later stages of the economy's phased reopening.
Citing the likes of gym facilities, he noted that many recreation and personal services firms may not be able to operate as effectively from home, which further dampens their takings.
On the other hand, education as well as financial and insurance services reported revenue growth.
Education services takings increased 5.7 per cent year on year, while financial and insurance services recorded a 3.7 per cent increase in earnings.
Meanwhile, the information and communications services industry saw revenue growth of 2.8 per cent, due mainly to firms engaged in computer programming and consultancy services as well as Web hosting and Web portal services.
On a quarter-on-quarter basis, overall services takings fell 5.9 per cent in the first quarter of 2020 compared with the previous three months.
All industries, except for those in the financial and insurance, and education services, registered lower quarter-on-quarter receipts.
“Overall, the services sector will probably take a larger hit in the second quarter, due to the circuit breaker measures (through April and May), with perhaps only the healthcare and infocomm companies spared,” Dr Chua said.