The Week In Numbers: Singapore Construction Demand Expected To Increase
The value of construction projects in Singapore is expected to grow to between S$25 billion and S$31 billion this year. This is an increase from the S$24.5 billion worth of contracts awarded last year, and is mostly due to an increase in public sector construction demand.
The Building and Construction Authority (BCA) estimates that there will be between S$16 billion and S$19 billion worth of public projects awarded this year, slightly more than the S$15.5 billion awarded last year. The private sector is also expected to pull its weight, as private demand is expected to come in at between S$10 billion and S$12 billion, up from S$9 billion a year ago.
American airlines are set to see a third consecutive year of growth in 2018. According to analysts, airlines are benefiting from the US tax reform, increased pricing power, and strong economic growth. The expected growth comes despite rising fuel costs as airlines should be offsetting this by increasing their ticket prices. Passenger revenue per seat mile is expected to grow by 2% to 3%.
Another reason to be bullish about airlines stocks is the fact that they currently trade at a relatively low price to earnings (PE) ratio of 12 on average. This is half that of the S&P 500’s average PE ratio of 23, and railroads’ average PE ratio of 25.
The World Bank has forecast the world economy to grow by 3.1% this year, and 3% in 2019. But, the bank warned that the favourable outlook is fragile and may be derailed by geopolitical tension and financial stress. Over in East Asia, the regional growth rate is forecasted to slow from 6.4% in 2017 to 6.2% in 2018. The structural slowdown in China is the main reason for the lower forecast this year.
Meanwhile, Japan’s real wage increased 0.1% in November on a yearly basis. This is the first increase in 11 months. Nominal cash wage rose 0.9% from a year ago. This was partly due to increases in bonus pay. Special payments that include bonus pay rose 7.5% from a year ago.
But, economists do not believe that Japan’s wage gains are likely to keep pace with inflation, and warn that this could hurt consumer spending. The nationwide core consumer price index (CPI), which include oil goods but excludes volatile fresh food prices, rose 0.9%, the 11th straight month of increase.
The number of employed in Japan also rose 2.6% in November from a year ago to 50.6 million people. This is roughly in line with the past 21 months, when the number of employed rose by more than 2% each month from a year ago.
Finally, the impact of Brexit has been felt in London’s finance industry. According to Bloomberg, job vacancies in the industry fell 52% in December. This was the most in three years. It also represented a 37% decline in job openings from a year ago. Analysts said that December is traditionally a quiet period in terms of hiring, but the size of this year’s decline is alarming.