市建局将开展计划 打造翠绿都市和空中绿意

Source : 《联合早报》Apr 30, 2009

新加坡寸土如金，高楼林立，为鼓励发展商开辟更多高楼绿色空间让人民享受，市区重建局将在刚出台的永续新加坡发展蓝图下，展开“打造翠绿都市和空中绿意”计划。

这项全新的“打造翠绿都市和空中绿意”（Landscaping for Urban Space and High Rises，简称LUSH）计划及永续蓝图的最终目标是，要在2030年前增添50公顷或相等于约一个碧山公园的空中花园，包括建屋发展局接下来三年在组屋区多层停车场屋顶上添设的九公顷公园，让每1000人可享有0.8公顷公园空间。

打造翠绿都市和空中绿意计划将使未来的滨海湾充满更多绿意。（市建局构想图）

新计划将推出两个崭新措施和两个修订措施，以进行更多高楼绿化的工作，进一步巩固我国花园城市的美誉，也朝建立“花园里的城市”的目标迈进。

从今年12月1日起，部分新建筑项目和重建项目的绿化面积，须等同于发展地段的大小。发展商可选择在地面楼层提供绿色空间，或在更高楼层开辟空中花园、植物槽等等。

更具体的说，所有在市区、滨海湾区、裕廊湖区和加冷河畔建起的新建筑物，都须有相等于建筑物总面积的空中花园和地面花园。2008年新加坡发展总蓝图重点之一的巴耶利峇中心，则不受这项新措施影响。

市建局城市规划与设计高级署长范秀玲昨天在记者会上宣布新计划后受访时说，当局将先在以上特定地方推行措施，然后进行检讨，才决定是否也要在其他地区推行。

市区乌节路建筑物 可获绿化屋顶津贴

此外，该局将从即日起，为市区和乌节路的现有建筑物业主提供绿化屋顶津贴。业主将享有多达50%屋顶面积或最多200平方公尺的额外可建筑面积，可用来开辟屋顶空中花园户外用餐区。

另一方面，为进一步推动绿化屋顶工程，国家公园局将在今年9月拨出800万元推出另一项实验性津贴计划，未来三年资助业主高达一半或最多每平方公尺75元的绿化屋顶费用。

绿化费用一般介于每平方公尺150元至180元。

除了上述新措施，市建局也修订现有两项措施，让新加坡的湛蓝天空挂上翠绿彩带。

自1997年起，有盖“天空廊道”（sky terrace）的楼面，可豁免纳入可建筑面积内。至今已有超过100个发展项目受惠。

不过，为鼓励发展商更积极地展开高楼绿化工作，市建局现在放宽建筑高度限制，允许发展商建更高的大楼。发展商所提呈的建筑蓝图，也须包括更多有关廊道绿化设计的细节。

市建局发展管制高级署长韩荣和指出，打从一开始就将绿化概念融入设计蓝图，可减少日后的建筑和技术问题，省时省事。

另外，市建局自2004年起让建筑业者在建筑底层建造“绿化层”（landscape deck）。所谓绿化层，是从地面凸起的平台，上面用来建造楼房或提供公共设施，下面是停车场。

在新计划下，市建局将加强绿化层的绿化工作。绿化层四周的至少60%面积，需有植物覆盖。

市建局局长蔡君炫说：“绿化新加坡的工程已见成效，我们正在通过展开高楼绿化工程以加快绿化步伐。我们希望更多居民，可享受一个绿意盎然的居住和工作环境。”

Expect False Starts And Slow Recovery

Source : The Straits Times, April 30, 2009

Flu crisis and sub-par growth worldwide add to economic risk: MAS

THE most intense phase of Singapore's recession may be over, but the economy is not going to bounce back to full health any time soon.

Instead, the recovery will be 'slow, gradual and fraught with uncertainties', unlike the quicker rebounds that followed previous downturns, said the Monetary Authority of Singapore (MAS) yesterday.

Singapore, with its high dependence on external markets, is among the nations worst hit by the global downturn, with the economy expected to contract by between 6 per cent and 9 per cent this year. -- ST PHOTO: ALPHONSUS CHERN

The central bank said in its latest Macroeconomic Review, a twice-yearly survey of the economy, that the worst economic contractions probably took place in the last quarter of last year and the first quarter of this year. The economy logged record quarter-on-quarter declines in both quarters, of 16.4 per cent and 19.7 per cent respectively.

But the MAS stopped short of saying that the worst is over or that the recession has bottomed out. Private-sector economists say that although the worst is likely behind us, the economy could continue to contract in the months ahead, although the declines will not be as severe.

The MAS warned yesterday that despite recent signs of a slight increase in economic activity around the world, the major economies are still 'mired in an extended period of sub-par growth' and Singapore's growth is likely to remain 'below potential' as long as that lasts.

The new scare over swine flu, which has eerie echoes of the economically painful Sars period, has also added 'a new dimension of risk to the outlook', it said.

Job losses are expected to rise further across most sectors as companies adjust to the new lower levels of demand. The MAS expects that by the end of the year, net unemployment excluding construction will likely surpass that recorded in the 1998 Asian financial crisis and the 2001 global tech bust. Compared to those recessions, the current downturn is the deepest and one of the longest, and stands out in being more broad-based than previous contractions, it said.

It added that while some green shoots have emerged in the form of new manufacturing orders and stock market rallies, these could turn out to be 'false starts'.

The purchasing managers' indexes in Singapore and around the world have indicated that manufacturing will pick up slightly, but this could simply be due to inventory restocking rather than a return of true demand, said the MAS.

Any rises in Singapore's stock market are also more likely to be 'bear rallies' rather than sustained recoveries.

Singapore, with its high dependence on external markets, is among the nations worst hit by the global downturn, with the economy expected to contract by between 6 per cent and 9 per cent this year. But the same openness will 'enable it to pick up strongly when the global recovery finally gets under way', said the MAS.

Citigroup economist Kit Wei Zheng said yesterday that the MAS' comments on the economy held 'no big surprises'.

'One of the things that came out quite clearly is that the recovery is going to be very slow and the economy will be going through a period of sub-par growth spanning a wide range of industries,' he said.

'The bottom line is: the worst of the labour market may not be over yet and we could see more unemployment pain in the months to come.'

But Credit Suisse economist Joseph Tan noted that there are some 'surprise factors' that could change the outlook for the economy. The main one is China, which is proving surprisingly resilient in its manufacturing, investment and retail sales numbers, he said. That could potentially help economies in the region do better than expected.

Singapore Is Asia's Most Liveable City

Source : The Straits Times, April 29, 2009

It also boasts best infrastructure in the world: Survey

SINGAPORE has risen six places in a global ranking of cities with the highest quality of living, overtaking cities such as Paris in France and Honolulu and San Francisco in the United States.

The other factor that contributed to Singapore's higher ranking is the presence of 'many good schools' in the city.

At 26th place, the Republic also surpassed all its Asian neighbours to be the region's best performer in the latest Worldwide Quality of Living Survey by human resource consultancy Mercer.

As the icing on the cake, Singapore also topped Mercer's list of cities with the best infrastructure in the world. It proved superior in various areas, including electricity and water supply, telephone and mail services, public transport, traffic congestion and range of international flights from local airports.

Although it is often taken for granted, infrastructure 'has a significant effect on the quality of living experienced by expatriates', said Ms Cathy Loose, Mercer's Asia Pacific global mobility leader.

The development of Marina Bay and Sentosa Cove as new waterfront living areas appear to have boosted Singapore's position in the rankings.

'Singapore already has excellent housing, but now its new ocean-front and seafront living options have allowed the ranking to move even higher,' said Mr Derrick Kon, Mercer's Singapore global mobility leader.

He added that the 'high-quality houses and apartments' that are available for rent and the 'excellent selection of appliances and furniture' for residents definitely helped elevate Singapore's quality of life.

The other factor that contributed to Singapore's higher ranking is the presence of 'many good schools' in the city, said Mr Kon.

'Singapore has always had a lot of good schools and international schools, but now there are also more private schools offering university degrees,' he said.

'If expatriates come here with their children, this is one area they would be looking at, and in Singapore they would have a lot of options, with international programmes and university programmes.'

Singapore's strong position in quality of life rankings such as these could stand the nation in good stead in the current financial crisis, said Mr Mark Ellwood, managing director of Robert Walters, another human resource consultancy.

With companies looking to cut costs, many are reducing the number of international assignments and localising their expat compensation packages where possible, which means not giving out the 'hardship' allowances or benefits that are offered to expats who have to live in cities with a lower quality of life.

'There is perhaps less of an argument these days that Singapore is a hardship posting, so you don't have to give many expat benefits in terms of additional bells and whistles,' said Mr Ellwood.

Singapore is the only Asian city on the top 100 list that managed to increase its ranking this year, with the rest largely maintaining their previous positions.

China's capital, Beijing, moved up three places from 116 to 113 due to public transport improvements stemming from the Olympic Games last year, but Bangkok in Thailand and Mumbai in India both dropped in the rankings amid worsened stability and security.

Globally, the Austrian city of Vienna overtook Switzerland's Zurich to boast the best quality of life this year. European cities continued to dominate the top positions in the ranking, amid a sprinkling of Canadian and American cities.

Mercer publishes this list annually to help multinational companies determine an appropriate amount of compensation for expatriates sent to work in difficult locations.

Huge Demand For Flats At The Peak

Source : The Straits Times, April 29, 2009

DEMAND for flats at The Peak @ Toa Payoh, a condo-like public housing, has been overwhelming.

When the developer closed its office at 6pm yesterday, there were already 2,900 applications for the 1,203-unit project.

This means there were roughly five applications for every two units. The final number might even be higher as electronic applications closed only at midnight last night.

The project at Lorong 1A Toa Payoh comes under the design, build and sell scheme (DBSS), and offers premium condo-like fittings.

This project by a Hoi Hup-led consortium is being sold by ballot. Unlike private condominiums, these projects do not have facilities such as swimming pools and gymnasiums.

Observers say the demand is surprising given that for the same price, buyers are spoilt for choice in the current lacklustre market.

URA, NParks Introduce Schemes To Promote More Sky Gardens In S'pore

Source : Channel NewsAsia, 29 April 2009

Singapore developers will enjoy new incentives to include skyrise greenery in their projects.

Highrise buildings at the financial district of Singapore

The government wants to see more sky terraces and rooftop gardens, as part of a multi-billion dollar sustainable development blueprint for Singapore for the next 20 years.

The initiative is known as Landscaping for Urban Spaces and High-rises (LUSH).

Fun Siew Leng, group director of Urban Redevelopment Authority (URA), said: "A lot of people place premium on having greenery at their doorstep. And it doesn't mean that by going high-rise you don't have access to greenery.

"So, one of these ways is to encourage and require more greenery to be built in the development itself, either at the ground level or even at the upper levels."

Come December 1 this year, new projects and re-developments within the central business district, Kallang Riverside and Jurong Gateway areas will be required to have green landscape at least equivalent in size to the development site area.

These can include ground floor landscape areas, as well as roof gardens and sky terraces. As a guide, 40 per cent of these areas are to consist of permanent planting.

Developers will also be given additional gross floor area of up to 200 square metres of roof space or 50 per cent, whichever is lower, for greening their rooftops for use such as outdoor refreshment areas.

This will be allowed over and above the Master Plan maximum allowable gross floor area for the site.

And it is not just new buildings that will stand to benefit from the initiative. NParks is introducing a pilot scheme later this year to encourage existing building owners to green-up their roof tops.

NParks is spending S$8 million over the next three years in cash incentives to co-fund up to half the cost of installing green roofs.

A green roof is defined as a lightweight growing system, which requires a proper selection of plant material for easy maintenance. The cost of installing a square metre of green roof typically ranges from S$150 to S$180.

"There are also benefits in reduction of heat as well. The green roof reduces the heat load going into the building as well as the ambient temperature of the roof itself," said Simon Longman, director of National Parks Board.

So far, there are more than 100 developments in Singapore with approved sky terraces.

NParks will start giving out the cash incentives in September 2009.

NParks plans to transform some 9 hectares of existing rooftops into green roofs over the next three years.

The URA is targeting to add 50 hectares of skyrise greenery by 2030. - CNA /ls

More 'Sky Gardens' Set To Blossom

Source : The Straits Times, April 30, 2009

New URA plan makes landscaping a must for new projects downtown

EXPECT to see more 'gardens in the sky' in Singapore, especially in areas like Orchard Road, Raffles Place and along the Singapore River.

A new plan launched yesterday by the Urban Redevelopment Authority (URA) makes it a must for new developments coming up in several areas from December to have landscaping.

With the Lush programme, there will be more landscaping, such as sky terraces at the upcoming Marina Bay Station Square (left) and planter boxes like those at the Singapore Management University. -- PHOTOS: URA

This can take the form of rooftop gardens, planter boxes and sky terraces on the upper levels. Developers will also be encouraged to landscape their grounds.

The areas affected by this new ruling are the Downtown Core - which encompasses Raffles Place, Shenton Way, and Marina Centre - along the Kallang River, and Jurong Gateway, the upcoming commercial hub in the west.

Existing buildings will not be left out.

Those in Orchard Road and the business district will be allowed to open outdoor refreshment areas on their rooftops. To do this, they will be given additional gross floor area of half the roof area or up to 200 sq m.

With the Lush programme, there will be more landscaping, such as sky terraces at the upcoming Marina Bay Station Square and planter boxes like those at the Singapore Management University (left). -- PHOTOS: URA

This complements a programme launched on Monday by the Building Construction Authority (BCA) and URA. Under it, private buildings which are eco-friendly enough to achieve high standards under BCA's Green Mark scheme get additional gross floor area.

The new URA initiative, launched yesterday, is called Landscaping for Urban Spaces and High-Rises (Lush), and is part of a national sustainability blueprint launched by an inter-ministerial committee on Monday.

The blueprint sets national targets for pollution standards, energy usage and green areas over the next 20 years, and aims to create a more environmentally friendly and energy-efficient nation.

In addition to the Lush programme, the National Parks Board also announced yesterday an $8 million fund that developers can tap to create rooftop gardens on existing buildings.

Newton Suites boasts extensive sky terraces and vertical greenery that are in line with the new URA initiative. -- PHOTO: PATRICK BINGHAM-HALL

To be launched in September, the fund will offset up to $75 per sq metre for landscaping costs - about half the $150 to $180 per sq m usually charged by gardening companies.

Landlords in the Orchard Road and downtown areas can apply to the fund.

In announcing the plans yesterday, the URA said that encouraging private developers to include greenery in their buildings is becoming increasingly important as Singapore becomes more built up.

Developers that The Straits Times spoke to yesterday welcomed the moves, but had suggestions to make the scheme more attractive as URA had said that the the usual development charges (DC) would apply.

The DC rate is pegged at 70 per cent of a building's enhanced land value.

Managing director of City Developments Kwek Leng Joo felt that while developers can make use of the additional area, they would have to grapple with the additional costs.

'We would suggest that the DC rate be pegged at the previous rate of 50 per cent instead of the current 70 per cent, which most developers find too high.

'This could make the incentive more attractive and effective to help the policy take off quickly,' he said.

US Q1 GDP Tumbles

Source : The Straits Times, April 29, 2009

# US economy shrinks more severely than forecast in Q1

# Inventories plummet by record amount, exports collapse

# Consumer spending recovers after sharp declines

WASHINGTON - THE US economy contracted at a surprisingly sharp 6.1 per cent rate in the first quarter as exports and business inventories plummeted.

The drop in gross domestic product, reported by the Commerce Department on Wednesday, was much steeper than the 4.9 per cent annual rate expected by economists and followed a 6.3 per cent decline in the fourth quarter.

US economy fell at a 6.1 per cent pace in the first quarter of 2009, signaling little improvement in a deep recession. -- PHOTO: AFP

GDP, which measures total goods and services output within US borders, has now dropped for three straight quarters for the first time since 1974-1975.

The data came as the Federal Reserve resumed a regular two-day meeting. The Fed, which has cut interest rates to almost zero and pumped about a trillion dollars into the economy to try and break its downward spiral, is expected to leave policy unchanged at the meeting.

US stock index futures pared gains after the GDP report, while government bond prices were little changed.

'There won't be positive growth until the second half of the year probably, but the fall in the second quarter, if it's negative at all, will be far smaller,' said Michael Darda, chief economist at MKM Partners in Greenwich Connecticut.

The advance report from the Commerce Department showed business inventories plunged by a record US$103.7 billion (S$154 billion) in the first quarter, as firms worked to reduce stocks of unsold goods in their warehouses. That sliced 2.79 percentage points from the overall GDP figure. Excluding inventories, GDP contracted 3.4 per cent.

Plummeting inventories good news
But the sharp drawdown in inventories is good news as it suggests that manufacturers and retailers have reduced the stock of unsold merchandise to manageable levels and could be instrumental in pulling the economy out of recession.

Recent manufacturing surveys by the regional Federal Reserve Banks have shown an improvement in new orders.

'We should see a diminishing effect from inventory on GDP going forward,' said Keith Hembre, chief economist at FAF Advisors in Minneapolis. -- REUTERS


Exports collapsed
EXPORTS collapsed 30 per cent, the biggest decline since 1969, after dropping 23.6 per cent in the fourth quarter. The decline in exports knocked off a record 4.06 percentage points from GDP.

Investment by businesses tumbled a record 37.9 per cent in the first quarter, while residential investment dived 38 per cent, the biggest decline since the second quarter of 1980.

However, there were some bright spots in the report. Consumer spending, which accounts for over two-thirds of US economic activity, rose 2.2 per cent, after collapsing in the second half of last year.

Consumer spending was boosted by a 9.4 per cent jump in purchases of durable goods, the first advance after four quarters of decline.

The Commerce Department said the government's US$787 billion (S$1.2 billion) rescue package of spending and tax cuts, approved in February, had little impact on first-quarter GDP.

Part of the stimulus package is designed to bolster state and local and government spending, which fell at a 3.9 per cent rate in the first quarter, the largest decline since the second quarter of 1981.

A separate report showed US home loan applications fell last week to the lowest level since mid-March, even as mortgage rates clung to record lows.

The Mortgage Bankers Association said its mortgage applications index, which reflects demand for both purchase loans and refinancings, fell 18.1 per cent. -- REUTERS

Property Transactions With Contract Dates Between April 13th - 18th, 2009

Rooftop Landscaping Gets $8m Boost

Source : The Business Times, April 30, 2009

NParks launches 3-year co-funding scheme; URA starts landscaping for urban spaces plan

Hot on the heels of a sustainable development blueprint released on Monday, the National Parks Board (NParks) yesterday announced a three-year $8 million scheme to co-fund rooftop landscaping in the city.

Lush living: Artist's impression of Marina Bay Station Square; MrSteed envisions it will ultimately be possible for all roofs to have green features

The Urban Redevelopment Authority (URA) also launched its landscaping for urban spaces and high-rises (Lush) programme to help meet the blueprint's goal of creating another 50 hectares of 'sky-rise' greenery by 2030.

'Despite Singapore being land scarce, greenery can be pervasive in our urban spaces,' said URA chief executive Cheong Koon Hean. From September this year, NParks will give cash incentives to owners who install green roofs on existing buildings in the downtown and Orchard planning areas. The scheme will first target low- to mid-rise developments that are highly visible, and those surrounded by little street-level greenery.

NParks hopes to create nine hectares of green roofs over the next three years. The incentives will cover up to half of installation costs, capped at $75 per sq m. According to the agency, the typical cost of installing a green roof ranges from $150-$180 per sq m.

Gardens on the roof cost more than those on the ground for every square metre, said Singapore Institute of Landscape Architects' president Henry Steed. 'But once you have built it, the asset is there and the land usable, whereas a plain roof is not.'

In conjunction with NParks' scheme, URA will offer owners who install green roofs bonus gross floor area (GFA) above the master plan permissible intensity. The additional space - limited to half of the roof area or 200 sq m, whichever is lower - can be used for outdoor refreshment areas.

Developers will have to pay a development charge (DC) or differential premium, but URA believes the bonus GFA offer is sufficiently attractive.

The current DC calculation formula creams off 70 per cent of the enhancement in land value, but 'there's still a 30 per cent gain for developers,' said URA's urban design deputy director Cheng Hsing Yao.

The GFA incentive scheme is part of URA's Lush programme, which includes other existing and revised measures to enhance the urban landscape.

For instance, developers applying to exclude sky terraces from GFA computations now have to submit detailed plans on landscaping and communal facilities at the terraces.

Developers housing car parks within raised decks must also put up earth berms for plants on at least 60 per cent of each side of the deck wall, and should surround the area with see-through fences rather than solid walls.

In the strategic areas of the Downtown Core, including Marina Bay, Kallang Riverside and Jurong Gateway, new developments also have to put in place 'sky-rise' greenery or ground-level landscaping equivalent to the site area in size.

For very small plots where buildings have to be tall to maximise the plot ratio, 'replacement is typically not too difficult,' said Singapore Institute of Architects immediate past-president Tai Lee Siang.

Both Mr Steed and Mr Tai believe more can be done to promote urban greenery.

Mr Steed, for instance, envisions it will ultimately be possible for all roofs to have green features ranging from gardens, water catchment areas and even mini-farms.

Will DC Complicate The Green Push?

Source : The Business Times, April 30, 2009

Reverting to the 50% formula might be timely

NEW incentives rolled out this week to support the greening of Singapore's buildings have once again put the spotlight on the formula for calculating development charges (DC).

For instance, the Building and Construction Authority and Urban Redevelopment Authority will offer bonus Gross Floor Area (GFA) of up to one per cent of total GFA capped at 2,500 square metres to developers that construct new buildings which attain Green Mark Gold Plus rating.

For new projects that achieve the top Platinum rating, a higher bonus GFA of up to 2 per cent capped at 5,000 sq m will be granted as incentive.

The bonus GFA is not free; DC is payable.

URA has also announced a new incentive to promote skyrise greenery. It will allow additional GFA for existing buildings within key activity corridors in the Orchard and Downtown Core planning areas.

The additional space can be used for outdoor refreshment areas on the rooftop level if owners provide rooftop landscaping for their developments. Again, DC is payable for this bonus GFA.

Unfortunately the way DC has been calculated since a formula change in July 2007 could diminish the attactiveness of these incentives. The current DC formula creams off 70 per cent of the appreciation in land value that arises from changing the use of a site or putting more GFA on it.

The previous DC formula, which was effective between 1985 and July 2007, creamed off 50 per cent of the enhancement in land value. A point to note is that prior to 1985, DC rates had also been based on the 70 per cent formula, until they were adjusted to 50 per cent during the 1985 recession.

With Singapore in the throes of a slump currently, many property industry players have called on the government to reinstate the 50 per cent formula.

After all, in 1985, the authorities deemed it fit to cut the DC rate to 50 per cent because of the recession and the same should apply now as Singapore is going through its worst recession.

Another reason to argue for a restoration of the 50 per cent DC formula is that sharing the appreciation in land value equally between government and private land owner - instead of developers being forced to surrender 70 per cent of the enhancement to the state - would be a fairer policy. Developers have to be given sufficient incentive to bear the risk of development.

Now, there's an extra reason why it would be timely for the government to reinstate the previous DC formula: to spur developers to attain higher Green Mark ratings for their buildings and promote skyrise greenery on the island. According to BCA data, it costs 2-8 per cent more to develop a building to attain the top Platinum standard and the payback period for this is between two and eight years.

For developments built to the second-highest Green Mark standard of Gold Plus, the green cost premium is 1-3 per cent and the payback period is 2-6 years.

Having to pay a lower DC rate on the bonus GFA would lessen the cost burden to developers keen on building new projects that attain the top two Green Mark ratings.

Some observers have suggested that even if the government refuses to restore the old 50 per cent DC formula, it should at least consider using this formula for computing DC for the bonus GFA under the new schemes announced this week.

But having different DC rates for different purposes may complicate things. Retaining the current uniform DC rate would be desirable but a reversion to the old 50 per cent formula would be a timely move for the government to give developers more bang for their buck to invest in green buildings.

It will also allow the government to get maximum effect from its newly minted schemes to promote Sustainable Development in Singapore.

6.1% GDP Plunge Dashes Economy Hopes

Source : The Business Times, April 30, 2009

LATEST US DATA

Consumer rebound in Q1 swamped by cutbacks elsewhere

(WASHINGTON) The US economy shrank at a worse than expected 6.1 per cent pace at the start of this year as sharp cutbacks by businesses and the biggest drop in US exports in 40 years overwhelmed a rebound in consumer spending.

The Commerce Department's report, released yesterday, dashed hopes that the recession's grip on the country loosened in the first quarter. Economists surveyed by Thomson Reuters expected a 5 per cent annualised decline.

Instead, the economy ended up performing nearly as bad as it had in the final three months of last year when it logged the worst slide in a quarter- century, contracting at a 6.3 per cent pace.

Nervous consumers played a prominent role in that dismal showing as they ratcheted back spending in the face of rising unemployment, falling home values and shrinking nest eggs.

In the January-March quarter, however, consumers came back to life, boosting their spending after two straight quarters of reductions. The 2.2 per cent growth rate was the strongest in two years.

Still, the consumer rebound was swamped by heavy spending cuts in virtually every other area.

Businesses cut spending on home building, commercial construction, equipment and software, and inventories of goods.

Sales of US goods to foreign buyers plunged as they retrenched in the face of economic troubles in their own countries. Even the government trimmed spending. It was the first time that happened since the end of 2005.

The sharp cuts underscore the toll that the housing, credit and financial crises - the worst since the 1930s - are having on the country. The recession, which began in December 2007, has taken a big bite out of national economic activity and snatched 5.1 million jobs.

To cushion the impact of the downturn, the Federal Reserve has slashed a key bank lending rate to a record low near zero and rolled out a string of radical programmes to spur lending. The Fed at the end of its two-day meeting yesterday is expected to keep its key rate near zero and probably hold it there well into next year.

President Barack Obama is counting on his US$787 billion stimulus of tax cuts and increased government spending on big public works projects to help bolster economic activity later this year.

The administration has also put forward programmes to rescue banks and curb home foreclosures - big negative forces weighing on the economy.

Before yesterday's weaker-than-expected report, many analysts were predicting that the economy would shrink less in the current April-June period - at a pace of one to 2.5 per cent - as Mr Obama's stimulus begins to take hold. Analysts also were hoping that the economy would start to grow again in the final quarter of this year.

However, the recent outbreak of the swine flu, which started out in Mexico and has spread to the US and elsewhere, poses a new potential danger. If the flu stifles trade and forces consumers to cut back further, those negative forces would worsen the recession.

Before the flu outbreak, Fed chairman Ben Bernanke said that the recession could end this year if the government succeeds in stabilising the shaky financial system and getting banks to lend again. -- AP

MAS Sees A Long, Painful Trek Ahead

Source : The Business Times, April 30, 2009

Swine flu adds new twist as S'pore prepares for extended period of sub-trend growth

The worst is probably over for Singapore in the downturn, but recovery - when it comes - will be prolonged and painful, with many sectors in for an extended period of sub-trend growth, says the Monetary Authority of Singapore (MAS).

Plus, the swine flu outbreak has added a new spin to an outlook already fraught with uncertainties, it notes in its latest biannual macroeconomic review published yesterday.

With almost 60 per cent of Singapore's exports headed for economies 'expected to be in outright recession in 2009', GDP here fell sharply in the last two quarters.

'Barring further significant external shocks, the most intense phase of this downturn for Singapore may have already occurred,' MAS says, adding though that a decisive rebound is not expected this year.

Instead, the climb out of recession will likely be slow, gradual and possibly 'marked by several false starts', as weak global demand and structural strains continue to weigh on the domestic sectors.

With the economy having lost almost 12 per cent in Q1 from its year-ago peak, the official projection of 6-9 per cent GDP contraction for 2009 means that the quarterly sequential expansion for the remaining three quarters of the year would be significantly less than the 9.5 per cent average (seasonally adjusted and annualised) in previous recessions, the MAS review says.

Indeed, in all three previous downturns - in 1985, 1998 and 2001 - the Singapore economy rebounded from the trough and returned to its previous peak within three quarters, the report notes. 'In this downturn, however, it will probably take longer to return to its previous peak.'

MAS expects the job market will likely weaken further, 'although prospects vary across industries', and reckons that net employment (excluding construction) by Q4 2009 could shrink by more than the net job loss recorded during the 1998 Asian financial crisis and the 2001 global IT downturn.

The manufacturing, financial and trade-related industries, in particular, may see severe job losses. Nominal wage increases will also likely be 'relatively muted' this year, compared with the 5.4 per cent rise seen in 2008.

The central bank maintains, however, that there is 'little likelihood at this point in time of a persistent, broad-based and self- sustaining drop in consumer prices' - or debilitating deflation - even with the inflation rate expected to fall to zero, or possibly minus one per cent, this year.

On the newly-developing swine flu epidemic, MAS says it is not certain at this stage how the outbreak will impact global economic prospects, and the situation bears close watching. There could be repercussions for the domestic economy, notably the transport and travel-related industries, initially through the immediate and direct transmission channels.

The confluence of adverse factors depressing global growth will likely persist into the next few quarters, MAS says. 'Global demand is unlikely to rebound strongly, with the major economies mired in an extended period of sub-par growth. The stresses in the global financial system are expected to weigh on economic activity for some time.'

A vastly open economy like Singapore's would be particularly susceptible to the global headwinds, especially as external demand has grown 'markedly' over the last decade as a source of growth.

But the extreme openness of the Singapore economy should also enable it to pick up more strongly than other countries when the global recovery eventually gets underway, MAS says.