The professional service and administrative and support service sectors are expected to recover this year, but are unlikely to reach pre-pandemic levels, given the continued sluggishness of the travel and construction industries.

Slow lifting of international travel restrictions is expected to weigh on the recovery of some professional service segments - such as business and management consultancy - while rental and leasing of construction machinery and equipment within the administrative and support service sector are predicted to take a hit.

These insights were shared in the Ministry of Trade and Industry's (MTI) quarterly economic survey results that were released yesterday, in an article focusing on the performance and outlook of the professional service and administrative and support service sectors in Singapore.

The two sectors provide a wide variety of essential services for business operations, such as accounting and advertising services. Combined, they accounted for more than 10 per cent of the overall economy's nominal value added last year.

Both sectors contracted sharply last year, owing to the economic fallout from the coronavirus pandemic, despite outperforming the Singapore economy from 2014 to 2019.

While there are some positive signs for the two sectors, such as general recovery in domestic and regional economic activity, the continued bleak outlook for travel and construction is likely to dampen recovery.

But the prospects for the professional service sector remain bright in the longer term, MTI said, adding that the administrative and support service sector will also continue to play an essential role in supporting the business operations of the various sectors of the Singapore economy.

The professional service sector is more dependent on external demand, while the administrative and support service sector is more reliant on intermediate demand from other sectors, such as manufacturing and wholesale trade.

The professional service sector recorded an overall contraction of 9.7 per cent last year, largely due to contraction in the architectural and engineering, technical testing and analysis, and other professional, scientific and technical service segments.

This came as a result of the sharp plunge in construction works and contracts awarded last year, as well as a decline in demand for advertising and market research activities amid cutbacks in spending among businesses during the downturn.

The administrative and support service sector, meanwhile, was weighed down by the decline in the real value added of the rental and leasing segment, which was affected by global travel restrictions, slower work progress at construction worksites and weaker domestic economic conditions.

The real value added of both sectors continued to remain below pre-Covid-19 levels in the first quarter of this year, given the ongoing effect of the pandemic, MTI noted.