ECONOMIC SURVEY OF SINGAPORE 2020 February 2021 Ministry of Trade and Industry Republic of Singapore website: www.mti.gov.sg email: [email protected] All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanised, photocopying, recording or otherwise, without the prior permission of the copyright holder. CONTENTS 02 48 80 Main Indicators Chapter 5 Chapter 7 of the Singapore Economy Balance of Payments Economic Outlook 06 54 84 Chapter 1 Chapter 6 Feature Article Economic Performance Sectoral Performance Performance Of The Singapore Economy In 2020 58 6.1 14 Manufacturing Chapter 2 Labour Market 60 6.2 and Productivity Construction 64 6.3 22 Wholesale Trade Chapter 3 Costs, Investments and Prices 65 6.4 Retail Trade 27 Box Article 3.1 Updated Business Cost 66 6.5 Conditions in Singapore’s Transportation & Storage Manufacturing and Services Sectors 68 6.6 Accommodation 70 6.7 Food & Beverage Services 71 6.8 40 Information & Communications Chapter 4 International Trade 72 6.9 Finance & Insurance 76 6.10 Real Estate and Professional Services 02 MAIN INDICATORS OF THE SINGAPORE ECONOMY OVERALL ECONOMY 2019 2019 2019 $510.7 billion +1.3% $78,847 GDP 2020 2020 at Current Real GDP 2020 GNI Market Price $469.1 billion (Year-on-Year-Growth) -5.4% Per Capita $72,418 STRUCTURE OF THE ECONOMY IN 2020 % OF NOMINAL VA BREAKDOWN OF SERVICES PRODUCING INDUSTRIES Wholesale Finance & Professional Trade Insurance Services 16.8% 15.7% 5.9% Transportation Information & Administrative & & Storage Communications Support Services 5.4% 5.1% 4.5% Real Retail Food & Beverage Services Producing Ownership Estate Trade Services Industries of Dwellings 70.1% 4.3% 3.0% 1.4% 1.0% Goods Producing Accommodation Other Services Industries Manufacturing Construction Industries 25.6% 21.5% 2.7% 0.4% 10.8% LABOUR MARKET COST PRICES Employment Unit Labour Cost of Consumer Price Index (as at year end) Overall Economy – All Items 2019 2020 (Year-on-Year Growth) (Year-on-Year Growth) 3,784.3 3,597.7 2019 2020 2019 2020 thousand thousand +2.3% -9.1% +0.6% -0.2% Overall Unit Business Cost Domestic Supply Unemployment Rate of Manufacturing Price Index 2019 2020 (Year-on-Year Growth) (Year-on-Year Growth) 2.3% 3.0% 2019 2020 2019 2020 -4.7% -14.4% -3.2% -8.7% Value-Added per Unit Labour Cost Singapore Manufactured Actual Hour Worked of Manufacturing Products Price Index (Year-on-Year Growth) (Year-on-Year Growth) (Year-on-Year Growth) 2019 2020 2019 2020 2019 2020 -1.3% +1.3% +4.9% -22.8% -3.3% -6.9% 03 MERCHANDISE TRADE SERVICES TRADE Merchandise Exports Services Exports 2019 2020 2019 2020 $532,514 $515,645 $296,277 $258,791 million million million million -4.2% -3.2% +6.2% -12.7% Year-on-Year Year-on-Year Year-on-Year Year-on-Year Growth Growth Growth Growth Merchandise Imports Services Imports 2019 2020 2019 2020 $489,712 $453,467 $284,015 $238,267 million million million million -2.1% -7.4% +5.2% -16.1% Year-on-Year Year-on-Year Year-on-Year Year-on-Year Growth Growth Growth Growth Top Trading Partners in 2020 Top 5 Services Exports Categories in 2020 (Share of Total Merchandise Trade) (Share of Total Services Exports) 14.1% 10.7% 10.6% 9.3% 28% 17% 8% 4% 32% China Malaysia United States EU Transport Financial Telecomms, Charges for the Other Services Services Computer and use of Intellectual Business Information Property Services TOP 5 TRADING PARTNERS AND SHARE OF TOTAL MERCHANDISE TRADE IN 2020 14.1% China 10.7% Malaysia 10.6% United States 7.8% 9.3% Taiwan EU LABOURECONOMIC MARKET PERFORMANCE AND PRODUCTIVITY 01 CHAPTER 06 Economic Survey of Singapore 2020 Chapter 1 | Economic Performance CHAPTER 1 ECONOMIC PERFORMANCE REAL GDP DECLINED BY 5.4% IN 2020 QUARTERLY GDP GROWTH IN 2020 (Year-On-Year Growth) 0 4 3.5% 0.0% -5 -2.4% 2 -5.8% 1.3% -10 -13.3% 0 -15 1Q 2Q 3Q 4Q -2 MAIN DRIVERS OF GDP GROWTH IN 2020 Manufacturing Finance Information & -4 & Insurance Communications -6 -5.4% 2018 2019 2020 1.4% 0.7% 0.1% point contribution point contribution point contribution INCOME COMPONENTS OF GDP IN 2020 SOURCES OF GROWTH IN 2020 External Domestic Demand Demand Gross Operating Surplus 56.2% 0 -1 Compensation Taxes Less of Employees -2 -1.3% -0.2% Subsidies -1.5% point point point 43.6% on Production -3 Consumption Gross Fixed Changes in 0.2% -3.1% Expenditure Capital Inventories -4 point Formation -5 Economic Survey of Singapore 2020 07 Chapter 1 | Economic Performance OVERVIEW In the fourth quarter of 2020, the Singapore economy contracted by 2.4 on a year-on-year basis, an improvement from the 5.8 per cent contraction in the previous quarter. All sectors shrank during the quarter, except for the manufacturing, finance & insurance, information & communications and wholesale trade sectors. For the whole of 2020, the economy contracted by 5.4 per cent, a reversal from the 1.3 per cent growth in 2019. The sectors that provided support to the economy were the manufacturing, finance & insurance and information & communications sectors, which posted expansions in 2020. OVERALL PERFORMANCE The services producing industries collectively contracted by 4.7 per cent year-on-year in the fourth quarter, improving Fourth Quarter 2020 from the 8.3 per cent contraction in the previous quarter. Among the services sectors, only the finance & insurance The economy contracted by 2.4 per cent year-on-year in (4.9 per cent), information & communications (2.6 per the fourth quarter, an improvement from the 5.8 per cent cent) and wholesale trade (1.8 per cent) sectors posted contraction in the preceding quarter (Exhibit 1.1). On a positive growth. quarter-on-quarter seasonally-adjusted basis, the economy expanded by 3.8 per cent, following the 9.0 per cent growth Meanwhile, the construction sector shrank by 27 per cent in the third quarter.1 year-on-year in the fourth quarter, improving from the 53 per cent contraction in the third quarter. The improved Exhibit 1.1: GDP and Sectoral Growth Rates in 4Q 2020 performance of the sector came on the back of the Manufacturing 10.3 resumption of more construction activities in the fourth Finance & Insurance 4.9 quarter as compared to the previous quarter. Information & Comms 2.6 Wholesale Trade 1.8 Full Year of 2020 Overall GDP Growth -2.4 Retail Trade -4.7 For the whole of 2020, the Singapore economy contracted Other Services Industries -5.7 by 5.4 per cent, a reversal from the 1.3 per cent growth in Professional Services -7.5 2019 (Exhibit 1.2). Real Estate -10.8 By sectors, the manufacturing sector expanded by 7.3 per Administrative & Support -14.9 cent in 2020, a turnaround from the 1.5 per cent contraction Food & Beverage Services -19.0 in 2019. The sector’s growth was supported by robust Accommodation -19.7 expansions in the biomedical manufacturing, electronics Transportation & Storage -27.4 and precision engineering clusters. Construction -27.4 Services producing industries shrank by 6.9 per cent in -40 -30 -20 -10 0 10 20 2020, reversing the 2.0 per cent growth in 2019. Among the services sectors, only the finance & insurance and Per Cent information & communications sectors expanded in 2020. The manufacturing sector grew by 10 per cent year-on-year Specifically, the finance & insurance sector grew by 5.0 per in the fourth quarter, extending the 11 per cent expansion cent, lower than the 7.8 per cent growth recorded in 2019. in the previous quarter. Growth was supported by output The information & communications sector expanded by expansions in the electronics, biomedical manufacturing, 2.1 per cent, slower than the 12 per cent growth registered precision engineering and chemicals clusters, which more in 2019. than offset output declines in the transport engineering and general manufacturing clusters. Meanwhile, the construction sector contracted by 36 per cent in 2020, a sharp reversal from the 1.6 per cent growth in 2019. Output in the sector was weighed down by declines in both public sector and private sector construction works. 1 The strong GDP growth seen in the third quarter was due to the phased resumption of activities following the Circuit Breaker that was implemented between 7 April to 1 June 2020, as well as the rebound in activity in major economies during the quarter as they emerged from their lockdowns. 08 Economic Survey of Singapore 2020 Chapter 1 | Economic Performance Exhibit 1.2: GDP and Sectoral Growth Rates in 2020 For the whole of 2020, only the manufacturing, finance Manufacturing 7.3 & insurance and information & communications sectors contributed positively to GDP growth (Exhibit 1.4). The Finance & Insurance 5.0 transportation & storage and construction sectors remained Information & Comms 2.1 the top contributors to the decline in GDP during the year. Wholesale Trade -2.4 Overall GDP Growth -5.4 Exhibit 1.4: Percentage-Point Contribution to Growth in Real GDP in 2020 (By Industries) Other Services Industries -8.9 Manufacturing 1.4 Professional Services -9.7 Finance & Insurance 0.7 Real Estate -14.2 Information & Comms 0.1 Administrative & Support -15.1 Retail Trade -0.2 Retail Trade -16.0 Accommodation -0.2 Food & Beverage Services -25.1 Food & Beverage Services -0.3 Transportation & Storage 25.4 Wholesale Trade -0.4 Accommodation -28.7 Real Estate -0.5 Construction -35.9 Professional Services -0.6 -50 -40 -30 -20 -10 0 10 20 Administrative & Support -0.7 Per Cent Other Services Industries -0.9 Construction -1.3 Contribution to Growth Transportation & Storage -1.6 Overall GDP Growth -5.4 In the fourth quarter, the manufacturing, finance & insurance, -8 -6 -4 -2 0 2 wholesale trade and information & communications sectors, contributed positively to GDP growth (Exhibit 1.3).