Based on advance estimates (PDF) by the Ministry of Trade and Industry (MTI), Singapore’s economy grew by 5.9 percent on a year-on-year basis in the fourth quarter of 2021, moderating from the 7.1 percent growth in the previous quarter.
These advance estimates are computed based on data from October and November 2021 and are intended as an early indication of Gross Domestic Product (GDP) growth in the quarter.
The Ministry said that the economy expanded by 2.6 percent in the fourth quarter on a seasonally-adjusted basis, faster than the 1.2 percent growth in the previous quarter.
For the whole of 2021, the economy expanded by 7.2 percent, rebounding from the 5.4 percent contraction in 2020.
Singapore’s economy was hit hard in 2020 by the restrictions imposed due to COVID-19, with a Circuit Breaker period lasting from April to the end of May which saw the closure of most workplaces and food establishments were only allowed to do takeaway.
In 2021, as Singapore saw a transition to “living with COVID”, there was a gradual re-opening of the country, although there were still some restrictions that were imposed due to rising cases throughout the year.
According to MTI, the manufacturing sector grew by 14.0 percent on a year-on-year basis in the fourth quarter of 2021, which was faster than the 7.9 percent growth in the third quarter.
This was supported by an expansion in all clusters. The electronics and precision engineering clusters recorded strong growth due to a sustained global demand for semiconductors and semiconductor equipment respectively.
On a quarter-on-quarter seasonally-adjusted basis, the manufacturing sector grew by 4.2 percent, an improvement from the 0.2 percent growth in the third quarter.
The construction sector grew 2.0 percent on a year-on-year basis in the fourth quarter of 2021, which is slower than the previous quarter’s 66.3 percent growth. The MTI noted that the third quarter’s strong growth was mainly due to the low base effects given the slow resumption of construction activities after the Circuit Breaker in last year’s third quarter.
However, the value-added of the construction sector still remained 26.0 percent below its pre-COVID level, as “activity at construction worksites continued to be weighed down by labor shortages due to border restrictions on the entry of migrant workers,” said MTI.
The sector contracted by 4.4 percent in the fourth quarter on a quarter-on-quarter seasonally-adjusted basis, a reversal from the 4.9 percent growth in the previous quarter.
Within the services sectors, the information & communications, finance & insurance, and professional services sectors collectively recorded the highest growth at a 6.0 percent expansion on a year-on-year basis, though moderating at an 8.0 percent growth from the last quarter.
This was driven by strong demand for IT and digital solutions. The finance and insurance sector was bolstered partly by fund management activities, noted MTI.
On a quarter-on-quarter seasonally-adjusted basis, the sectors in the group grew by 3.1 percent in the fourth quarter, faster than the 1.5 percent expansion in the preceding quarter.
The wholesale & retail trade and transportation & storage sectors grew by 4.3 percent on a year-on-year basis in the fourth quarter. The wholesale trade sector had steady growth owing to the robust performance of Singapore’s merchandise exports.
Growth in the transportation and storage sector was partially due to low base effects from the last year, as “travel restrictions had weighed heavily on the air transport segment in the fourth quarter of last year”. Overall, the value-added of this group of sectors still remained 2.3 percent below its pre-pandemic level, using the fourth quarter of 2019 as a base.
On a quarter-on-quarter seasonally-adjusted basis, the sale & retail trade and transportation & storage sectors grew by 2.3 percent in the fourth quarter, a reversal from the 0.6 percent contraction in the preceding quarter.
Finally, the remaining group of services sectors, which are the accommodation & food services, real estate, administrative & support services, and other services sectors, grew by 3.1 percent on a year-on-year basis.
All sectors expanded with the exception of the accommodation & food services sector. The weak performance was due to ongoing travel restrictions and tighter domestic restrictions such as group size limits for dining in at food establishments, as compared to the same period in the previous year.
The value-added of the sectors in this group remained 7.1 percent below its pre-pandemic level in the fourth quarter of 2019.
On a quarter-on-quarter seasonally-adjusted basis, these sectors expanded by 4.9 percent in the fourth quarter of 2021, improving from the 1.5 percent growth in the previous third quarter.