As a nation heavily reliant on foreign trade, Singapore’s economic growth prospects are bright in light of recovering global economies, particularly the US and Europe. The island nation, which enjoys one of the world’s highest GDP per capita, saw economic growth of 4.9 per cent in the first quarter of 2014 on a year-over-year basis, which out-stripped estimates.
Coupled with the boost from the global economic turnaround, Singapore’s manufacturing sector, which will play a key role in the country’s economic performance throughout the remainder of the year, saw solid annualized growth of 9.8 per cent in the first quarter.
Singaporeans’ confidence in the state of the local economy, job prospects and their perception of their own personal finances waned in recent years, reflecting the country’s close ties to global markets, but it has shown signs of strengthening in recent quarters. In the first quarter of 2014 close to six in 10 Singaporeans (58 per cent) viewed local job prospects over the coming 12 months as good or excellent (up from 50 per cent in Q1 2013).
More than half (54 per cent) perceived their personal finances over the next 12 months to be good or excellent (unchanged versus Q1 2013). Consumers remain cautious with their spending, with a little more than a third of Singaporeans (37 per cent) believing it is a good time to buy the things they want or need (up from 35 per cent in Q1 2013), although overall spending intentions across many categories have shown signs of improvement in Q1 2014 compared to Q1 2013, particularly intention to spend on fashion (+10 points), holidays and vacations (+8 points), home improvements/decorating (+6 points) and technology (+3 points).
Inflation remains relatively low and stable at 117.31 index points and while food CPI has recorded a modest increase, the majority of Singaporeans are comfortable handling the small price increase without changing their shopping behaviours.
Singapore’s relatively old and aging population—47 per cent of the population is forecast to be aged 55 years or over by 2030 according to the IMF—presents an opportunity for brands to develop products that address the needs of older consumers, particularly in sectors such as retail, banking, finance and travel.
When it comes to connecting with consumers and building brand advocacy, many brands still rely heavily on traditional media platforms such as television and print. While penetration of those avenues remains high (+70 per cent), digital media is playing an increasingly important role in delivering news and information to Singaporeans thanks to rising ownership of connected devices such as smartphones and tablets. Close to nine in 10 Singaporeans (87 per cent) own a smartphone, the second highest ownership in Asia Pacific behind Hong Kong. Tablet ownership increased from 17 per cent in 2012 to 47 per cent in 2013.