New data on Singapore's economic performance in the July to September quarter was released on Thursday morning by the Ministry of Trade and Industry. Here's a quick summary of the key points:
1. Stronger growth this year:
The Singapore economy's growth forecast for this year has been upgraded to between 3.5 per cent and 4 per cent, from a previous estimate of between 2.5 per cent and 3.5 per cent, on the back of stronger-than-expected growth in the third quarter. This year's growth will be three times as fast as last year's 1.3 per cent expansion, and is due to a better global economy and continued strength in construction and services.
2. Manufacturing recovers, but exports falter:
The manufacturing sector grew by 5.5 per cent in the third quarter over the year before, up from growth of 1.3 per cent in the second quarter of the year. But exports continued to shrink in the July to September quarter, falling 3.3 per cent over a year ago. For the whole of this year, exports are expected to contract between 4 and 5 per cent.
3. Slower expansion next year:
MTI released its first forecast for 2014 economic growth, tipping an expansion of 2 to 4 per cent. It said sectors that rely on the global economy, such as manufacturing and transportation and storage, are likely to buoy growth. But some labour-intensive domestic sectors may be weighed down by the continuing tightness in the labour market.
4. Productivity improves:
Singapore's labour productivity grew 1.6 per cent in the July to September quarter over last year, a jump from the 0.2 per cent growth in the second quarter. Sectors that logged the highest productivity gains included finance and insurance, wholesale and retail trade, and manufacturing. Those with the sharpest declines in productivity were construction, accommodation and food services, and information and communications.
5. Risks and uncertainties:
Will markets react badly to the US Federal Reserve's tapering of its stimulus? Could the US fail to raise its debt ceiling in a timely manner? Is another flare-up of the euro zone sovereign debt crisis on the cards? What about a sharper-than-expected slowdown in China? These were some of the risks to the global growth outlook that MTI flagged on Thursday. If these risks materialise, they could take a toll on Singapore's growth next year.