Singapore's GDP advanced 2.7 percent year-on-year in the first quarter, following 2.9 percent increase in the previous period. The growth was mainly bolstered by the manufacturing sector, namely the electronics and precision engineering clusters, which expanded on the back of robust demand for semiconductors and semiconductor manufacturing equipment. However, growth in domestic-oriented sectors has been largely muted, reflecting a sluggish construction activity and weak retail sales. On the positive note, financial services improved on the back of soaring global financial markets.
Singapore's exports are one of the main sources of revenue for the economy. After falling by 5.2 percent in 2016, sales already advanced 15.2 percent in the first four months of the year boosted by electronics, oil, and chemicals. Imports also went up 15 percent, following 4.9 percent drop in the previous year, driven by electrical and office machinery, petroleum, chemicals, plastics, and telecommunications equipment.
Also, manufacturing PMI remained in the expansionary territory for the seventh consecutive month in May, after contracting for almost 2 years. Strong global demand for electronics, in particular, semiconductors has boosted factory production.
Singapore's consumer prices returned to growth this year, after being in negative territory in the previous 2 years. Higher prices of oil-related items, such as electricity and petrol, were the main drivers of the increase. The inflation was recorded at 0.4 percent in April, and expected to rise to 0.5-1.5 percent from -0.5 percent last year.
Labor market conditions worsened this year, with the unemployment rate rising to 2.3 percent in the first quarter. It was the highest jobless rate since 2009, mainly due to jobs losses in manufacturing (-4,400) and construction (-12,900) as the number of foreigners holding work permits for less-skilled jobs declined.
Property market showed signs of recovery, after three years of price decreases. New home sales more than doubled in April from the previous year and reached the highest level in nearly four years in March. The boost came after the government eased some property cooling measures in March, which were in an effect since 2009. Still, housing prices fell 0.4 percent in the first quarter, marking the fourteenth consecutive period of decline and the longest losing streak since the series started in 1975.