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2015 Singapore Business Review

January 18, 2016 | Sharon Cheong

The Singaporean economic outlook is quite interesting. In the third quarter of 2015, Singapore's economy rebounded splendidly by expanding 1.9 percent at SAAR or seasonally adjusted annualized rate compared to the previous quarter (at 2.6 SAAR). This came on the back of a smaller drag on the manufacturing sector and a significant expanding in services. 

This led to a sharp figure revision from up to 0.1 percent increase, which was reported in the advance reading. In light of China's slowdown and its potential spillover effects on countries all over Asia, Singapore began depending on its strong financial sector to protect its economy. 

Tepid but Steady Growth in 2015 

Growth has been tepid for the country according to the latest data. This is because in October, manufacturing posted negative growth and non-oil domestic exports swung to contraction. There's still growth for Singapore, but it's for the most part modest. 

  • Second Quarter Flat Growth and SAAR Fall: In the second quarter of 2015, the Ministry of Trade and Industry reported a 2.6 percent fall on SAAR or the seasonally adjusted annualized rate. There were predictions at the time of flat growth among Singaporean markets. 
  • Percentages During the Second Quarter: The manufacturing industry of Singapore had a 17.3 percent decline in Q2. Furthermore, it's a 0.2 percent quarter-on-quarter SAAR decline for the same period for service. The good news is that there's a 13.4 increase in the second quarter of 2015 as well. 
  • Upward Revision and Growth in Third Quarter of 2015: The Singaporean economy rebounded significantly in the third quarter after the government's Ministry of Trade and Industry made an upward revision of 1.9 percent compared to the second quarter's 2.6 percent fall. 
  • Quarterly Expansion in the Third Quarter: Because of quarter-on-quarter SAAR improvements in manufacturing and services that offset the deterioration of the construction sector, there came about a quarterly expansion in Q3. 
  • Winners and Losers in the Third Quarter: In Q3, it's like a reversal of the Q2 ups and downs. There's a 3.5 increase in the third quarter for service and a 4.6 percent fall (smaller than Q2) for manufacturing. Unfortunately, there's also a 1.6 percent fall in the same period for construction (from the previous huge increase). 
  • Labor Force and External Environment on the Latest Quarter: Thanks to its slow labor force growth and its challenging external environment (namely, China's own economic slowdown), the economic performance of Singapore next year might be constrained. 

Economic Forecast for 2016 

In 2016, Focus Economics Panelists project a 2.2 percent economic growth for Singapore. This is down about 0.1 percentage points from the forecast made in the third quarter. There should be a better outlook in 2017, where economic growth could pick up by 2.6 percent. 

GDP expanded for Singapore by 1.9 percent, which is down from the 2 percent increase in the second quarter, marking its lowest reading since Q3 2012. Expectations from the Singaporean Monetary Authority include GDP growth at a rate from between 2 percent to 2.5 percent in 2015 to a 3.3 percent acceleration of growth in 2016. 

Servcorp, meanwhile, has Singapore's back when it comes to helping out in its own way with its continued healthy economic outlook. It can do so with its serviced office services that assist any company with a lack of office space to get fully furnished offices available to them at competitive rates. Please call +65 6690 6161 for more information