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Straits Times
3 days ago
- Business
- Straits Times
Singapore retail sales rise in April by 0.3%
The total retail sales value in April was $3.9 billion. PHOTO: ST FILE SINGAPORE - Retail sales in Singapore continued rising in April, continuing the growth in the previous month. On a year-on-year basis, retail sales grew 0.3 per cent, extending the 1.3 per cent growth in March , according to figures released by the Singapore Department of Statistics on June 5. Excluding motor vehicles, seasonally adjusted retail sales rose 0.2 per cent from March. The total retail sales value in April was $3.9 billion. Online sales accounted for 12.6 per cent of this, lower than March's 13.3 per cent. Half of the total sales of computer and telecommunications equipment were made online (49.8 per cent). For furniture and household equipment, online sales proportion was 30 per cent, and for supermarkets and hypermarkets, 13.1 per cent. Within the retail trade sector, more than half of the industries recorded year-on-year growth in sales in April, with computer and telecommunications equipment sales seeing the highest growth (14.8 per cent). The sales of watches and jewellery rose 12.9 per cent due to higher sales of jewellery, while sales of recreational goods rose 4.9 per cent. In contrast, the petrol service stations sector and the wearing apparel and footwear sector recorded year-on-year sales declines of 10.6 per cent and 10.3 per cent, respectively. Food and beverage sales increased 1.2 per cent in April on a year-on-year basis, reversing the 2.7 per cent decline in March . On a seasonally adjusted basis, sales of food and beverage services also increased 1.2 per cent in April compared with the previous month. The total sales value of food and beverage services in April was estimated at $947 million. Of this, an estimated 25.9 per cent was from online sales, higher than the 25 per cent recorded in March. Year-on-year declines were seen for restaurants at 3.7 per cent, but fast-food outlets sales saw a rise of 1.9 per cent, while sales for food caterers went up 19.9 per cent. Overall, retail sales were likely impacted by the challenging recovery in tourist arrivals, which remain below pre-pandemic levels as of April year-to-date, said UOB economist Jester Koh. Furthermore, retail sales continue to be weighed down by the diversion of residents spending abroad, with the Singdollar still exhibiting relative strength among the Asian currencies year-to-date, said Mr Koh. 'We continue to foresee downside risks to Singapore's retail sales over the coming months amid elevated economic uncertainty,' said DBS Bank economist Chua Han Teng. Weaker domestic labour market conditions, which already softened in the first quarter of 2025, have the potential to further dampen household spending and retail sales, said Mr Chua. 'Heightened global trade policy uncertainty and high global trade frictions will negatively impact Singapore's export-reliant economy, especially in the second half of 2025,' he added. 'This will in turn weigh on business hiring and wage increment, leading to belt-tightening by households, and dragging down retail sales.' Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
3 days ago
- Business
- Business Times
Singapore shares rise on US rate-cut hopes, softer T-bill yields; STI up 0.4%
[SINGAPORE] Local shares rose on Thursday (Jun 5) as softer US hiring data boosted rate-cut expectations amid falling Treasury bets. Meanwhile, Singapore's latest six-month Treasury bill cut-off yield hit a new year-to-date low at 2.05 per cent, based on auction results released on the day. The benchmark Straits Times Index (STI) rose 0.4 per cent or 13.81 points to end at 3,917.69. In the broader market, gainers beat losers 331 to 177 as a billion securities worth S$1.2 billion changed hands. Data released on Thursday showed that Singapore retail sales inched up 0.3 per cent year on year in April, easing from the 1.3 per cent growth in March. The sluggish retail sales growth was weighed down by petrol service stations, consistent with the downtrend in Brent crude oil prices amid lower petrol consumption, as well as challenging retail activities in wearing apparel and footwear, department stores and furniture and household equipment, UOB's global economics and markets research team wrote in a note. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The bank's associate economist Jester Koh wrote: 'Retail sales are likely to remain tepid in 2025, although measures in Budget 2025 as well as recent tourism promotion efforts with international celebrities showcasing Singapore's tourism landmarks in their music videos could lend some support to retail sales activity.' On the STI, Yangzijiang Shipbuilding led the gains, up 4.5 per cent or S$0.1 at S$2.31. Wilmar International was at the bottom of the list, down 0.7 per cent or S$0.02 at S$3.03. The trio of local banks ended the day mostly flat. DBS edged up 0.02 per cent or S$0.01 to S$45.02. OCBC was unchanged at S$16.23. UOB was down 0.03 per cent or S$0.01 at S$35.29 on a cum-dividend basis. Regional markets closed mixed on Thursday. South Korea's Kospi extended its post-election rally to close up 1.5 per cent. Japan's Nikkei 225 dropped 0.5 per cent, while the Bursa Malaysia Kuala Lumpur Composite Index rose 0.7 per cent.
Business Times
25-04-2025
- Business
- Business Times
Potential slight downgrade in Q1 GDP growth after March factory output expansion misses: economists
[SINGAPORE] Private-sector economists are watching for a potential downward revision to Q1 2025 gross domestic product growth from the advance estimate, after manufacturing output underperformed in the quarter. The Republic's factory output gained 5.8 per cent year on year (yoy) in March, strengthening from the previous month's upwardly revised growth of 0.9 per cent, data from the Economic Development Board (EDB) showed on Friday (Apr 25). This was as manufacturing for the key electronics cluster recovered. But the latest reading missed private-sector economists' forecasts of an 8.1 per cent expansion in a Bloomberg poll. It also came amid a favourable base effect, economists pointed out. Excluding the volatile biomedical sector, March's industrial production rose 4.9 per cent on the year, up from February's revised growth of 2.8 per cent. On a seasonally adjusted monthly basis, manufacturing output fell 3.6 per cent in March. Excluding biomedical manufacturing, output decreased 0.8 per cent month on month. OCBC, UOB, Barclays and Maybank economists noted that advance GDP growth estimates of 3.8 per cent yoy for Q1 factored in a 5 per cent growth on year for the manufacturing sector. March's industrial production outturn translates to a possible one percentage point downward revision to the first quarter's manufacturing growth to 4 per cent, they said. This hence implies a downgrade of Q1 GDP growth estimate to about 3.6 per cent, assuming other conditions remain unchanged. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Darker skies ahead DBS senior economist Chua Han Teng believes that the outlook for the export-oriented manufacturing sector will likely weaken – especially for the second half of this year. Singapore's factories 'remain vulnerable to the heightened unpredictability and uncertainty from the US tariff roller coaster', he said, adding that base effects will also be high in H2. Various US consumer surveys are already reflecting a slump in consumer sentiment, added UOB associate economist Jester Koh. Furthermore, weaker successive readings in sub-indices of Singapore's overall Purchasing Managers' Index are 'early signals of intensifying headwinds in the manufacturing sector', he said. Maybank's Chua Hak Bin and Brian Lee expect exports and manufacturing output to turn negative in H2, if US President Donald Trump's sweeping tariffs remain in place. This despite the 'silver linings' they highlighted that could cushion the sector. A lower effective tariff rate is levied on Singaporean goods compared to other countries in the region, due to exemptions of certain products from the reciprocal tariffs. Supply chains could also be moved in Singapore's favour, given that the city-state is subject only to baseline tariffs. They also believe that front-loading could continue in Q2, during the 90-day reprieve for reciprocal tariffs and temporary exemptions on some electronics goods. OCBC chief economist Selena Ling said that the domestic manufacturing outlook 'remains uncertain', depending on the outcome of negotiations during the 90-day suspension period for reciprocal tariffs, and the extent that dampening effects on business and consumer confidence impacts global demand conditions. However, she added: 'Even assuming that some of the tariffs – especially on China – are partially unwound over time, if companies have put on hold their capex, investments or hiring intentions, this would still imply some downside growth risk.' Still, she thought that the official forecast of 0 to 2 per cent growth, revised downwards earlier this month, 'appears to have accommodated a significant slowdown in the coming months'. Barclays analysts Brian Tan and Liu Hongying disagreed, saying that the cut 'appears to be backward-looking, incorporating mainly the Q1 GDP downside surprise – and not necessarily significant future tariff-related weakness'. They believe that policymakers are 'still too hopeful'. Performance by cluster Half the clusters tracked reported increases in production yoy. Output in the key electronics cluster recovered strongly in March, surging 8.9 per cent after reporting a mere 0.2 per cent expansion in February. Most segments within the cluster – semiconductors (8.2 per cent), infocomms and consumer electronics (14.1 per cent) and other electronic modules and components (1.6 per cent) – recorded growth, with only the output from computer peripherals and data storage (-2.9 per cent) shrinking. But while electronics performance is still healthy, it is 'slightly disconcerting' that the precision engineering cluster is 'already softening' (-0.1 per cent), especially for precision modules and components, said OCBC's Ling. This could suggest that some front-loading momentum could be subsiding, potentially due to the heightened tariff uncertainties, she said. Ling also noted that the chemicals cluster (-6 per cent) was a 'key drag'. Output also slid for general manufacturing (-13 per cent). The 'silver linings' were the resilient growth in transport engineering (20.2 per cent) and volatile biomedical manufacturing (17.2 per cent), she said. EDB noted that the transport engineering's aerospace segment (30.9 per cent) was bolstered by higher production of aircraft parts and more maintenance, repair and overhaul jobs from commercial airlines. Meanwhile, chemicals' pharmaceuticals segment (44.1 per cent) recorded higher production of biological products as well as a different mix of active pharmaceutical ingredients being manufactured compared to the previous year. DBS' Chua flagged that while the electronics and biomedical clusters improved, they remain susceptible to downside risks from Trump's threatened levies on semiconductor and pharmaceutical imports. As the city-state is deeply integrated into the global semiconductor supply chain, it is indirectly vulnerable to a broader US tariff-induced semiconductor downturn, he said. Singapore faces higher downside growth risks from US pharmaceutical import duties, compared to some of its Asean peers, he added. If introduced, these targeted tariffs' impact will be significant, agreed Maybank's team, as the two sectors account for about 38 per cent of Singapore's manufacturing.
Yahoo
06-02-2025
- Business
- Yahoo
Budget 2025 likely to talk about cost of living, investments in AI, finance, green transition and fertility: UOB
UOB's economist Jester Koh predicts Singapore to have a 'modest' fiscal deficit of $2.7 billion or 0.4% of GDP in FY2025. Singapore's Budget 2025 is likely to take on an expansionary fiscal stance ahead of this year's general elections, says UOB's associate economist Jester Koh. The budget, which will be presented by Prime Minister and finance minister Lawrence Wong on Feb 18, is likely to be the final one under the current term of government. The general elections will have to be held by Nov 23. 'Since 2005, we observe that the overall fiscal position tends to be more expansionary (i.e. wider deficit) in the final two years of the five-year terms of government, possibly due to increased spending ahead of the general elections,' Koh writes. 'This could also be the upshot of adhering to the principles of fiscal prudence where precautionary spending led to meaningful accumulation of fiscal surpluses in the first three years of the terms of government (except in 2021-2023 during the post-Covid recovery phase) and spending is subsequently augmented in the last two years, nonetheless keeping within the limits of the Balanced Budget Rule (BBR).' In his Jan 31 note, Koh predicts Singapore's overall fiscal position in FY2024 to be at $5.0 billion or 0.7% of the country's GDP, compared to $0.8 billion or 0.1% of Singapore's GDP estimated in Budget 2024. Based on historical revenue collection patterns and monthly fiscal year-to-date data from April to December 2024, Koh also estimates Singapore's operating revenue for FY2024 to be 'significantly higher' than projected at last year's Budget. This is due to stronger corporate income taxes thanks to a positive outturn in economic growth of 4% in 2024, compared to the Ministry of Trade and Industry's (MTI) estimate of 1% to 3%. During the year, Singapore also reported larger personal income tax receipts, which was attributed to improvements in nominal income growth. In addition, the strong growth in Goods and Services Tax (GST) receipts were partly due to the 1 percentage point increase in GST to 9% on Jan 1, 2024. Based on historical data and quarterly fiscal year-to-date data from April to September 2024, Singapore's total expenditure could also come in higher in FY2024. Possible overspending could come from the various ministries in national development (MND), transport (MOT), home affairs (MHA) and defence (MINDEF). At the same time, these could be offset by undershoots under the ministries of social and family development (MSF), sustainability & the environment (MSE) and manpower (MOM). Furthermore, the fiscal deficit for FY2023 could be narrowed to $2.9 billion or 0.4% of Singapore's GDP, compared to the previous projection of $3.6 billion or 0.5% of GDP. As such, these factors will give the government more room to help lower income households from the higher cost-of-living pressures while still sticking to the principle of fiscal prudence. With a stronger fiscal position, Koh foresees that Budget 2025 should be 'broadly expansionary'. This year's budget should also see a 'modest' fiscal deficit of $2.7 billion or 0.4% of GDP in FY2025. Budget 2025 themes In Koh's view, this year's Budget could revolve around four main themes. They are: cost-of-living and job security measures; strategies to boost the nation's fertility rate; anchoring investments in key areas such as artificial intelligence (AI), finance and the green transition to create good jobs and upskill the workforce, as well as supporting families through every stage of life. The last point is based on Chapter 4 of the Forward Singapore Report and the National Day Rally speech in 2024. In addition, UOB's wishlist includes Singaporeans receiving additional Community Development Council (CDC) vouchers of at least $600 per household in FY2025. The bank also hopes to see an enhancement and rebranding of the assurance package to go along with the themes of SG60. This year will be Singapore's 60th birthday since its independence in 1965. Specifically, the bank hopes to see a higher quantum of payouts and U-save rebates under the package in 2026 with an extended support scheme for low- and middle-income households beyond 2026. Other items on UOB's wishlist include a one-off cost-of-living cash support for low-income households and the augmentation of the SkillsFuture Jobseeker Support (JS) or SkillsFuture Level-up Programme. Softer growth rates in 2025 In 2025, the economist expects the growth rate for corporate and personal income tax collections to moderate, in line with the estimated softening in nominal GDP growth. The latter is due to a lower real GDP growth forecast of 2.5% in 2025 as well as a normalisation in the pace of general price increases. Similarly, Koh expects nominal wage growth to soften in 2025 in line with a cooling – albeit still tight – labour market. According to the MOM's latest polls, about 31.6% companies surveyed in 4Q2024 say they intend to raise their employees' wages compared to 32.6% of companies polled in 4Q2023. Meanwhile, the softer corporate income growth is estimated to be mitigated by the implementation of both the Income Inclusion Rule (IIR) and the Domestic Top-up Tax (DTT) under Pillar Two of BEPS 2.0. Both regulations will take effect for businesses' financial years beginning on or after Jan 1 this year. GST collections will also likely see slower y-o-y growth compared to the near 20% increases seen in FY2023 and FY2024 no thanks to the successive 1 percentage point GST hikes on Jan 1, 2023, and Jan 1, 2024. In 2025, Koh foresees 'resilient' stamp duty collections as private property transaction volumes has likely bottomed out, with tailwinds from the ongoing easing of interest rates by the Federal Reserve and its consequent passthrough to domestic Singapore overnight rate average (SORA) rates, albeit with a lower sensitivity. The increase in the supply of certificates of entitlement (COE) should also 'bode well' for vehicle quota premiums, especially if there is still robust demand for motor vehicles. Looking ahead, Koh projects healthcare-related expenses to rise 'materially' over the long-term due to higher spending requirements stemming from an ageing population. According to the National Population and Talent Division, a strategy group under the Prime Minister's Office (PMO), one in four citizens are likely to be aged 65 years or above by 2030 from about one in five currently. In the occasional paper on medium-term fiscal projections published by the Ministry of Finance (MOF) in 2023, the government says it expects healthcare expenses to increase to 2.9% to 3.5% of Singapore's GDP in FY2026-FY2030 compared to 2.3% in FY2016-FY2020 and 2.9% in FY2021-FY2025. Singapore's defence spending is also likely to stabilise in the years ahead due to the rising need to bolster defence capabilities as well as the need to uphold deterrence amid heightened geopolitical tensions and cybersecurity threats. This observation comes despite the general downward trend as a share of nominal GDP in recent years, which is in line with member countries of the Organisation for Economic Co-operation and Development (OECD). In addition, the Net Investment Returns Contribution (NIRC), which has become an increasingly important supplement to Singapore's operating revenues, should see positive impact in the long run thanks to the facilitation of the transfer of excess Official Foreign Reserves (OFR) to the government for long-term management by GIC via the Reserve Management Government Securities (RMGS). Finally, Koh foresees the ongoing capitalisation of development expenditure under the Significant Infrastructure Government Loan Act (SINGA10) on projects such as the North South Corridor, Deep Tunnel Sewerage System, the Cross Island Line and the Jurong Region Line. The economist forecasts core inflation in 2025 to average around 1.7%, down from 2024's 2.7%, signalling a return to a desired pace of price increases. Singapore's real GDP is likely to grow by 2.5%, down from 2024's 4.0%, due to a slowdown in growth momentum in trade-related sectors in 2H2025 from tariffs. Charts: UOB See Also: Click here to stay updated with the Latest Business & Investment News in Singapore Jefferies targets DBS shares to hit $49; UOB to hit $42; OCBC to reach $19 ahead of 4QFY2024 results Our 2025 picks: UOB — Banking dilemma throws up a dark horse JS-SEZ might have increased urgency for DBS to expand into Malaysian market: CreditSights Read more stories about where the money flows, and analysis of the biggest market stories from Singapore and around the World Get in-depth insights from our expert contributors, and dive into financial and economic trends Follow the market issue situation with our daily updates Or want more Lifestyle and Passion stories? Click here
