In the last quarter of 2014, manufacturing grew by a meagre 1.6 per cent, a net drop compared to the previous 3.1 per cent. In his year-end speech, the prime minister said that productivity growth was "weak". Estimates for next year announce "modest" growth. Service sector and construction show promise.

Singapore (AsiaNews/Agencies) - The city-state's economy expanded less than expected last quarter after its manufacturing industry weakened because of sluggish growth in China and an uneven global recovery.

Gross domestic product (GDP) rose an annualised 1.6 per cent in the three months to 31 December from the previous quarter, when it expanded 3.1 per cent, the Trade Ministry said in a statement on Friday.

Today's data show that Singapore's productivity growth is weak, confirming what Prime Minister Lee Hsien Loong said on Wednesday.

The Trade Ministry noted that the economic outlook for 2015 was "modest" with a tight labour market restraining some industries.

The export-dependent city-state is having to adjust to China's weakest full-year growth in almost a quarter century, even as the US saw its biggest expansion in more than a decade in the third quarter.

Overall, three trends are discernible. "China's slowing, Japan's pretty moribund, Europe's still essentially going nowhere," a local economist said.

In addition to Chinese manufacturing slipping to its lowest level in 18 months in December, world economic growth grew last year at its slowest pace since 1990.

This is reflected in Singapore's manufacturing, which fell 5.8 per cent last quarter from the previous three months, the Trade Ministry said.

Conversely, the services industry grew 3.8 per cent in the same period, whilst construction expanded by 8 per cent.

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