There had been hope that a resilient service sector would offset Singapore's industrial decline to lift national output but yesterday's grim trade data virtually killed that off.
The numbers showed that the service sector is starting to buckle, with non-oil re-exports - a proxy for wholesale trade services - plunging 12 per cent last month from January last year.
This marked a sharp reversal from last December, when non-oil re-exports grew 0.8 per cent.
Instead of services making up for the factory shortfall, knock-on effects from the trade slump are spilling over to the sector.
Throughput at PSA International's Singapore ports fell 8.7 per cent last year and that will have repercussions for the logistics industry, said CIMB Private Banking economist Song Seng Wun.
Bank of America Merrill Lynch economist Chua Hak Bin said: "This is one ominous sign that service growth, which held up well late last year despite a manufacturing recession, may be caving in this year."
Services created far fewer jobs in the fourth quarter last year, so few that the NTUC formed a committee with the Government and the banking sector to ready the financial-sector workforce for change.
Mr Song said: "A ground check among businesses has certainly suggested that there will be further layoffs from the service sector after Chinese New Year."
This article was first published on February 18, 2016.
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