Singapore’s Growth Slows: How Did the Manufacturing, Construction, and Wholesale & Retail Industries Do?

SingaporeOn 12 August 2014, the Ministry of Trade and Industry (MTI) released Gross Domestic Product (GDP) growth figures for the quarter. Most sectors in Singapore saw a slowdown in growth compared to the last quarter. In fact, the entre Singapore economy had seen its growth rate slow to 2.4% in the second quarter of 2014, down from 4.8% in the first quarter.

As the saying goes, when it rains, it pours. The MTI has also decided to lower its GDP growth forecast for the whole of 2014 to 2.5% instead of 3.5% previously.

Let’s take a closer look at a number of individual industries. You can find a discussion for the Transportation & Storage, Finance & Insurance, and Accommodation & Food Services here.


The manufacturing industry only managed to grow 1.5% in the second quarter, which is a huge drop from a growth rate of 9.9% in the first quarter. Manufacturing is poorly represented in the Straits Times Index (SGX:^STI), with none of the STI’s 30 constituents belonging to the industry.

Companies such as Hi-P International Ltd (SGX: H17) can be considered to be in the manufacturing industry as it is it an integrated contract manufacturer. Riverstone Holdings Limited (SGX: AP4) is another example of a manufacturing outfit, given that it makes rubber and nitrile gloves for customers in the electronics and medical fields. It should be noted though, that Riverstone is based in Malaysia and is a gentle reminder of how Singapore-centric economic developments might not always be relevant even for Singapore-listed shares.


The construction industry grew 4.4% in the second quarter, slightly lower than 6.4% in the first quarter. The slower growth is mainly due to the slowdown in the private residential development market in Singapore, which in turn has also affected the property market as a whole. Companies such as Yongnam Holdings Limited (SGX: Y02) and Chip Eng Seng Corporation Ltd (SGX: C29) are significant players in the construction industry in Singapore.

Wholesale & Retail

The wholesale and retail market in Singapore only grew 1.7% in the second quarter, down from growth of 3.8% in the first quarter. This sector is well represented in the STI, with companies such as Noble Group Limited (SGX:N21) and Olam International Ltd (SGX:O32) being considered part of the family.

Foolish Summary

It seems that all the major industries in Singapore had faced a harder time in the second quarter, though it must also be noted that there is still growth. That said, with slower growth happening, the growth assumptions we have for the businesses we own might need to be rejigged a little. So, think about what all these data might mean for your investments.

Though, on the bright side, if you’re a value investor (like me!) with a penchant for buying shares with a margin of safety, a slight adjustment in the macro-economic outlook is not something for us to worry about. In fact, a 1% downward-adjustment to the forecasted growth of Singapore’s GDP might even have little impact on our investments if there’s a sufficient margin of safety involved.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Stanley Lim doesn't own any shares of companies mention above