Positive economic data brings cheer for year ahead

Good economic numbers on a range of fronts underscored how well the Singapore economy performed last year.
Good economic numbers on a range of fronts underscored how well the Singapore economy performed last year. PHOTO: ST FILE

Good economic numbers on a range of fronts yesterday underscored how well the economy performed last year - and suggested another good year is in the offing.

Most attention came with news that gross domestic product expanded 3.6 per cent last year, which was ahead of initial estimates and markedly higher than the 2.4 per cent expansion in 2016.

The increase was thanks mostly to robust growth among manufacturers and surging global demand for electronic gadgets.

There was also good news on the trade front, with non-oil domestic exports growing at the fastest pace in seven years. Shipments shot up 8.8 per cent last year, a stark reversal from the 2.8 per cent decline in 2016. It was the fastest expansion since 2010, and beat International Enterprise Singapore's earlier tip of 6.5 per cent to 7 per cent expansion.

Trade growth is expected to stay robust this year, although there could be easing from 2017's pace.

The surging economy last year had another welcome payoff: Strong improvement in overall labour productivity. It grew at its fastest pace in seven years, expanding 4.5 per cent, a significant improvement on the 1.8 per cent recorded in 2016.

It was primarily driven by productivity gains in export oriented sectors such as manufacturing, wholesale trade, and finance and insurance, which prospered on the back of an uptick in the global economy.

Export focused sectors have incentives to boost output given the global competition they face. It is less so for domestic oriented sectors such as food and real estate, where productivity gains were less evident.

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A version of this article appeared in the print edition of The Straits Times on February 15, 2018, with the headline 'Positive economic data brings cheer for year ahead'. Print Edition | Subscribe