Singapore: Consumer Price Developments in feb 2019

Singapore: Consumer Price Developments in feb 2019

Singapore: Consumer Price Developments in feb 2019

The FINANCIAL -- In February 2019, MAS Core Inflation eased to 1.5% on a year-on-year (y-o-y) basis, from 1.7% in January, due to smaller increases in the costs of services, retail items and electricity & gas.1 Despite lower core inflation, CPI-All Items inflation edged up to 0.5% y-o-y, from 0.4% in the previous month, due to more gradual declines in private road transport and accommodation costs.

CPI-All Items inflation came in higher at 0.5% y-o-y in February

CPI-All Items inflation picked up slightly to 0.5% y-o-y in February, from 0.4% in January, mainly on account of more gradual declines in private road transport and accommodation costs, which outweighed lower inflation for services, retail items and electricity & gas.
Private road transport costs decreased by 2.3% y-o-y in February, less than the 3.4% drop in the preceding month, due to smaller declines in both car and petrol prices.
Accommodation costs fell by 1.6% y-o-y in February, slower than the 1.9% decline in the previous month. This was due to a more gradual fall in housing rentals, as well as a larger increase in the cost of housing maintenance & repairs.
Food inflation came in at 1.4% in February, unchanged from the preceding month, as a larger increase in the prices of prepared meals was offset by a smaller rise in the prices of non-cooked food items.
The cost of electricity & gas rose at a slower pace of 5.5% y-o-y in February compared to the 6.5% increase in January. This reflected the effect of the phased nationwide launch of the Open Electricity Market (OEM) on electricity prices.
The overall cost of retail items rose by 1.1% y-o-y in February, easing from the 1.4% increase recorded in January, mainly on account of a smaller rise in the prices of clothing & footwear.
Services inflation moderated to 1.5% y-o-y in February, from 1.7% in the previous month. This was due to a slower pace of increase in education services fees as well as airfares.
CPI less imputed rentals on owner-occupied accommodation (CPI-ex OOA) inflation picked up to 1.0% y-o-y in February
Inflation as measured by CPI less imputed rentals on owner-occupied accommodation (OOA) rose slightly to 1.0% y-o-y in February, from 0.9% in the preceding month, as the more gradual pace of decline in private road transport costs outweighed the smaller increases in the costs of services, retail items and electricity & gas.


Assistance for opening a company in Singapore  

MAS Core Inflation came in lower at 1.5% y-o-y in February

MAS Core Inflation, which excludes the costs of accommodation and private road transport, eased to 1.5% y-o-y in February, from 1.7% in the previous month. This mainly reflected lower inflation for services, retail items and electricity & gas.

On a year-on-year basis, Singapore’s manufacturing output increased 0.7% in February 2019. Excluding biomedical manufacturing, output fell 1.6%. On a seasonally adjusted month-on-month basis, manufacturing output decreased 4.1% in February 2019. Excluding biomedical manufacturing, output fell 0.1%

BUSINESS EXPECTATIONS OF THE MANUFACTURING SECTOR I Business Sentiments for January – June 2019

1. A majority of firms (a weighted 76 per cent) in the manufacturing sector expects business conditions in the next six months to remain similar to a quarter ago. A weighted 5 per cent of manufacturers expects business conditions to improve while a weighted 19 per cent foresees a weaker business outlook. Overall, a net weighted balance of 14 per cent of manufacturers anticipates a less favourable business situation for the period January – June 2019, compared to the fourth quarter of 2018.
2. Within the manufacturing sector, the biomedical manufacturing and the transport engineering clusters expect a positive business outlook in the first half of 2019.
3. In the biomedical manufacturing cluster, a net weighted balance of 6 per cent of firms foresee a favourable operating environment in the next six months. This positive sentiment is largely due to the medical technology segment which expects export orders to remain strong.
4. In the transport engineering cluster, a net weighted balance of 4 per cent of firms expects an improvement in business conditions in the January – June 2019 period, compared to a quarter ago. This is mainly led by the marine & offshore engineering segment which anticipates a continual modest uptick in demand for oil & gas-field equipment and ship repairing activities in the first half of 2019. However, offshore rig orders remain subdued.
5. On the other hand, the rest of the manufacturing clusters are less optimistic about business prospects in the first half of 2019, compared to a quarter ago. In particular, the electronics and precision engineering clusters foresee weaker orders, amid softening demand for semiconductors and semiconductor-related equipment as well as growing concerns over global trade tensions.

6. Compared to the fourth quarter of 2018, a net weighted balance of 2 per cent of manufacturers expects output to decrease in the first quarter of 2019.
7. Within the manufacturing sector, the biomedical manufacturing cluster is the most optimistic, with a net weighted balance of 35 per cent of firms projecting a higher level of production in the first quarter of 2019, compared to a quarter ago. The pharmaceuticals segment forecasts higher production of active pharmaceutical ingredients while the medical technology segment projects increased output to meet export demand for medical devices in the next three months.
8. A net weighted balance of 18 per cent of firms in the transport engineering cluster expects a higher level of activity in the next three months. In addition to the projected increase in ship repairing work in the marine & offshore engineering segment, the aerospace segment anticipates more aircraft engine repairs for commercial airlines.
9. In contrast, the electronics, precision engineering and general manufacturing industries clusters expect production level to fall in the first quarter of 2019, compared to the preceding quarter. The weaker production outlook for the electronics and precision engineering clusters is largely due to the slowdown in the semiconductor market worldwide and uncertainties arising from global trade tensions. Within the general manufacturing industries cluster, firms expect output to be seasonally lower in the first quarter of the year.


10. A majority of firms (a weighted 84 per cent) in the manufacturing sector expects the employment level in the next three months ending March 2019 to remain similar to a quarter ago. Overall, a net weighted balance of 2 per cent of manufacturers plans to hire fewer workers in the first quarter of 2019, compared to the fourth quarter of 2018. Among the manufacturing clusters, the electronics, precision engineering and general manufacturing industries clusters expect to hire fewer workers for the period January – March 2019.

11. Amajorityoffirms(aweighted75percent)inthemanufacturingsectorreportednolimitingfactors that would affect their ability to obtain export orders in the first quarter of 2019. A weighted 22 per cent of firms, on the other hand, indicated price competition from overseas competitors and political or economic conditions abroad as the top two limiting factors that could affect their export orders.

Source: Singapore Economic Development Board
The Singapore Economic Development Board (EDB), a government agency under the Ministry of Trade and Industry, is responsible for strategies that enhance Singapore’s position as a global centre for business, innovation, and talent. We undertake investment promotion and industry development, and work with international businesses, both foreign and local, by providing information, connection to partners and access to government incentives for their investments. Our mission is to create sustainable economic growth, with vibrant business and good job opportunities for Singapore.


Consumer Price Developments in February 2019
In February 2019, MAS Core Inflation eased to 1.5% on a year-on-year (y-o-y) basis, from 1.7% in January, due to smaller increases in the costs of services, retail items and electricity & gas.1 Despite lower core inflation, CPI-All Items inflation edged up to 0.5% y-o-y, from 0.4% in the previous month, due to more gradual declines in private road transport and accommodation costs.
CPI-All Items inflation came in higher at 0.5% y-o-y in February
CPI-All Items inflation picked up slightly to 0.5% y-o-y in February, from 0.4% in January, mainly on account of more gradual declines in private road transport and accommodation costs, which outweighed lower inflation for services, retail items and electricity & gas.
Private road transport costs decreased by 2.3% y-o-y in February, less than the 3.4% drop in the preceding month, due to smaller declines in both car and petrol prices.
Accommodation costs fell by 1.6% y-o-y in February, slower than the 1.9% decline in the previous month. This was due to a more gradual fall in housing rentals, as well as a larger increase in the cost of housing maintenance & repairs.
Food inflation came in at 1.4% in February, unchanged from the preceding month, as a larger increase in the prices of prepared meals was offset by a smaller rise in the prices of non-cooked food items.
The cost of electricity & gas rose at a slower pace of 5.5% y-o-y in February compared to the 6.5% increase in January. This reflected the effect of the phased nationwide launch of the Open Electricity Market (OEM) on electricity prices.
The overall cost of retail items rose by 1.1% y-o-y in February, easing from the 1.4% increase recorded in January, mainly on account of a smaller rise in the prices of clothing & footwear.
Services inflation moderated to 1.5% y-o-y in February, from 1.7% in the previous month. This was due to a slower pace of increase in education services fees as well as airfares.
CPI less imputed rentals on owner-occupied accommodation (CPI-ex OOA) inflation picked up to 1.0% y-o-y in February
Inflation as measured by CPI less imputed rentals on owner-occupied accommodation (OOA) rose slightly to 1.0% y-o-y in February, from 0.9% in the preceding month, as the more gradual pace of decline in private road transport costs outweighed the smaller increases in the costs of services, retail items and electricity & gas.

MAS Core Inflation came in lower at 1.5% y-o-y in February
MAS Core Inflation, which excludes the costs of accommodation and private road transport, eased to 1.5% y-o-y in February, from 1.7% in the previous month. This mainly reflected lower inflation for services, retail items and electricity & gas.

CPI – All Items

The CPI is commonly used as a measure of consumer price changes in the economy. It tracks the change in prices of a fixed basket of consumption goods and services commonly purchased by the general resident households over time.
The CPI covers only consumption expenditure incurred by resident households. It excludes non- consumption expenditures such as purchases of houses, shares and other financial assets and income taxes etc.
The CPI – All Items provides a comprehensive overview of the prices of consumer goods and services. Nevertheless, useful information can also be revealed by complementary CPI series derived by excluding specific items in the All Items basket. For example, two other CPI series reported on a monthly basis are the CPI less imputed rentals on owner-occupied accommodation and the MAS Core Inflation.
CPI less imputed rentals on owner-occupied accommodation
Accommodation, one of the groups in the Housing & Utilities category of the CPI, comprises “rented and owner-occupied accommodation”, as well as “housing maintenance & repairs”. A significant share of the Accommodation group is “owner-occupied accommodation (OOA)” cost, which is meant to reflect the costs to homeowners of utilising the flow of services provided by their homes over an extended period of time. As the cost of using housing services is not directly observed for homeowners, it is proxied by market rentals.
Changes in the CPI imputed rentals on OOA, however, have no direct impact on the monthly cash expenditure of most households in Singapore as they already own their homes. Hence, the CPI less imputed rentals on OOA is compiled as an additional indicator to track households’ actual expenditures. Actual rentals paid on rented homes are still included in this measure.
MAS Core Inflation
The Monetary Authority of Singapore (MAS) monitors a core inflation measure that excludes the components of “Accommodation” and “Private Road Transport”. These items are excluded as they tend to be significantly influenced by supply-side administrative policies and are volatile. Core inflation is meant to capture the generalised and persistent price changes that are driven by underlying demand conditions. It thus provides useful information for monetary policy which has the objective of ensuring price stability in the medium term.

 


Videos

Watch the video