Economists warn that haze could jeopardise economic growth

[Rogue Trader]

Haze may impact economic growth if condition does not improve: economists
By Wong Siew Ying
POSTED: 21 Jun 2013 8:52 PM


Economists said the thick haze that is shrouding Singapore could potentially cast a pall over its economic growth if the situation does not improve in the coming months.

A general view shows the Singapore River blanketed by haze. (AFP PHOTO / Roslan Rahman)

SINGAPORE: Economists said the thick haze that is shrouding Singapore could potentially cast a pall over its economic growth if the situation does not improve in the coming months.

CIMB Research estimated that for each day the haze lingers, over S$60 million in tourism receipts could be at stake.

klapsons The Boutique Hotel, located in Singapore's central business district, has shut two outdoor dining outlets for now as air quality remains in the unhealthy range.

The two outlets contribute about 40 per cent of the hotel's revenue.

It said some guests have also decided to give Singapore a miss.

Anna Tong, general manager at klapsons The Boutique Hotel, said: "Our customers are business people. So as they come to Singapore to do business and because regionally it is known that the haze is really affecting our part of the world, so they have redirected their travel plans and gone somewhere and hopefully come back later. So we did have some cancellations of about maybe 12 per cent of our occupancy.”

Meanwhile, the crowd at Boat Quay, a popular spot with tourists and office workers, has also thinned.

Some F&B operators at Boat Quay said earnings have dropped by more than 50 per cent in the last two days and some customers have also cancelled their reservations.

As business slows down, some operators said they will probably cut back on the hiring of part-time staff.

If the haze persists throughout the third quarter, economists said it could potentially hurt Singapore's economy, which is expected to grow by between 1 and 3 per cent this year.

Alvin Liew, senior economist at United Overseas Bank, said: “We did some back-of-the-envelope numbers looking at weakening in the key sectors due to this haze. We think it could affect anything from 0.3 to maybe 0.5 percentage-point of headline growth this year. Our growth forecast this year is looking at 3 per cent growth, so it may be lower at 2.5 per cent.”

Last year, over 14 million tourists visited Singapore, spending some S$23 billion.

Economists said the growth picture could get cloudy if they stay away.

In response to Channel NewsAsia's query, the Singapore Tourism Board said it is premature to determine the extent of the impact of the haze on the tourism sector, and it is monitoring the situation closely.

Meanwhile, the construction sector - another important growth driver - may be affected if the government issues a stop-work order.

Song Seng Wun, regional economist at CIMB Research, said: "If we were to put the two together… (If) 5 per cent from the construction sector stop work, in the hospitality-related tourism industries another 5 to 6 per cent, that's 10 per cent of Singapore's economy. If assuming everything remains constant, that can potentially be knocked off the Singapore economy, so it can make a difference between growth and contraction in that worst-case scenario."

On top of that, a decline in economic activity could also affect productivity.

But economists said even if Singapore's economy takes a hit in Q3, it should rebound fairly quickly in the following quarter once the haze clears, and assuming the global economy holds up well.


- CNA/xq

 

[po2wq]

ah loon n his jingang gonna haf no bonus! ...

 

[Rogue Trader]

Singapore's economy starts to choke on Indonesia smoke
By Martin Abbugao (AFP) – 43 minutes ago

People sit at bars along the Boat Quay in Singapore, on June 21, 2013 (AFP, Roslan Rahman)

SINGAPORE — The severe smog over Singapore caused by forest fires in Indonesia could hurt the city-state's economy if it persists for weeks, economists said Friday as the pollution index hit new record levels.

Tourist spots are shutting down, companies are allowing staff to work from home and a VIP airport has suspended operations. Some Singapore restaurants were almost deserted during the normally busy Friday lunch period.

As thick grey smoke and the acrid smell of burning wood and grass smothered the city-state for a fifth day running, economists said tourism in particular could suffer from Singapore's worst environmental emergency since the 1997 haze crisis.

Singapore Prime Minister Lee Hsien Loong said Thursday that the problem "can easily last for several weeks, and quite possibly longer until the dry season ends in Sumatra".
The season lasts from June to September.

"The impact on Singapore from the Indonesian haze is particularly severe this year, and could become worse than 1997," said Rajiv Biswas, Asia Pacific chief economist at research firm IHS Global Insight.

"If the haze persists over the coming weeks during the seasonal slash-and-burn period in Sumatra, it has the potential to have significant negative effects on the Singapore economy.
"Images of the haze enveloping Singapore are being widely reported on TV channels and other media globally, and can be particularly damaging to Singapore's world-class tourism industry."

Tourism is a revenue-spinner for Singapore, a tiny city-state that has designed itself as a regional hub for everything from hosting conventions to managing the wealth of the world's millionaires.

Singapore welcomed 14.4 million visitors last year who generated Sg$23 billion ($18 billion) in tourism-related revenues. The sector contributed 4.0 percent directly to the gross domestic product (GDP).

"If the number of tourist visitors fall sharply even for several months, this will hurt Singapore's GDP numbers for the third quarter of 2013," Biswas said.

He noted that such a decline would come at a time when Singapore's manufacturing sector, a traditional pillar of the trade-driven economy, is hurting from weak orders, particularly for electronics products, from its main markets the United States and Europe.

"It's a bit of a disappointment that you can't really see the towers or the buildings. And it's a bit dark," said 26-year-old British tourist Amy Jones, referring to Singapore's famous Marina Bay Sands casino complex which looks like a curved ocean liner perched on three hotel towers over 50 storeys high.

Jit Soon Lim, head of equity research for Southeast Asia at Nomura Singapore Ltd, said domestic consumption will also suffer as residents stay indoors.
Singapore's GDP is expected to grow between 1 and 3 percent this year, according to official forecasts.

The Pollutants Standards Index rose to an all-time high of 401 at midday Friday, a level deemed as potentially life-threatening to ill and elderly persons if it persists over a 24-hour period.
Wild Wild Wet, a popular aquatic park in the island's eastern suburbs, was shut down along with the Singapore Flyer, the world's biggest Ferris wheel.

Jurong Bird Park was open but outdoor shows have been cancelled.

Seletar Airport, which services the private jets of VIP guests, was also closed "as a result of prolonged poor visibility caused by the haze," authorities said.

The main Changi Airport remains operational.

Non-essential employees at Malaysian bank CIMB were allowed to work from home and staff were given N95 masks, which block out 95 percent of airborne particles larger than 0.3 microns, said the lender's regional economist Song Seng Wun.

But one sector is a direct beneficiary of the haze problem -- surgical masks are in short supply because people have been buying them in great numbers from pharmacies.

Southeast Asia's worst haze crisis took place in 1997-1998, causing widespread health problems and costing the regional economy billions of dollars as a result of business and air transport disruptions.


Copyright © 2013 AFP. All rights reserved

 

[THE_CHANSTER]

You do not have to be an economist to realize that the have will adversely impact on economic growth for the country.

1) Fewer foreign visitors (business and leisure). Tourism is a major revenue earner and this will be severely impacted.
2) Less productivity in the construction and F&B sectors. For a country where at least 95% eat outside of the home, expect more home cooking and less being spent on hawkers and food courts.
3) Increase in respiratory related alignments especially amongst the old and very young = More MCs being issued and sickness days being taken.
4) Foreign investors will think twice about relocating their business to Sinkie if the haze problem is not permanently resolved.

If the 1997-98 haze cost the region billions of dollars in lost business and air transport disruptions, 2013 will be even worse.

A third quarter fall in GDP is a forgone conclusion.

 

[zeddy]

The shipping industry will also be affected.. Today heard from a colleague that shipyard workers from a certain company being ordered to stopped work by the company's safety officers due to the haze..

MPA harbour pilots also busy at work directing the vessels who are on their way to PSA port and Anchorages around the country..

The risk is very real out there at sea.. Poor visibility even during the day.. All it takes is just a vessel colliding with another vessel and the results is going to be disastrous..

 

[bushtucker]

3) Increase in respiratory related alignments especially amongst the old and very young = More MCs being issued and sickness days being taken.

People of every age group and from the working population are already taking more MCs. e.g. those with asthma, dry eyes, sinuses, breathing problems, throat irritation, etc.

 

[whoami]

People of every age group and from the working population are already taking more MCs. e.g. those with asthma, dry eyes, sinuses, breathing problems, throat irritation, etc.

6.9 million. Better start building more hospitals to prepare for these neverending yearly haze...

 

[steffychun]

US military won't use Changi Naval Base?

 

[winnipegjets]

US military won't use Changi Naval Base?

The Chinese will take over and PAP won't charge them a cent.

 

[steffychun]

The Chinese will take over and PAP won't charge them a cent.

I think they dont charge the US or others.

Chinese ships docking in haze filled Changi? good luck

 

[THE_CHANSTER]

The risk is very real out there at sea.. Poor visibility even during the day.. All it takes is just a vessel colliding with another vessel and the results is going to be disastrous..

Yes, and the same goes for Air Traffic Controllers at Changi. It will certainly be challenging for them.

 

[mojito]

Nonsense. Sales of N95 masks, air purifiers and healthcare services will surely make up for weakness in other sectors of the economy.

 

[johnny333]

Breathing all that toxic smoke is going to have a future impact on all Sporeans. We may have more future cancer, asthma,.....cases & even deaths.

 

[THE_CHANSTER]

Breathing all that toxic smoke is going to have a future impact on all Sporeans. We may have more future cancer, asthma,.....cases & even deaths.

Really no different from connecting a tube to your car exhaust and sticking the other end into your mouth.

How was you Air Con installation? All sorted now?

 

[Rogue Trader]

Singapore, Malaysia face economic hit from prolonged haze

Reuters
Monday, Jun 24, 2013

SINGAPORE - Singapore and Malaysia could face a bigger economic impact than from their worst air pollution crisis 16 years ago if slash-and-burn fires in Indonesia continue to rage in the coming weeks, turning off tourists and raising business costs.

Restaurants, tourist attractions and some other businesses are already feeling the pain as haze envelopes the Southeast Asian neighbours, from Singapore's upscale shopping districts to Malaysia's popular beach resorts.

The haze crisis in 1997 lasted about three months and cost Southeast Asia an estimated $9 billion from disruptions to air travel, health expenses and other business impacts. Economists and businesses say the costs are already mounting about a week since air pollution levels in the countries shot up to unhealthy and sometimes hazardous levels.

"The haze has definitely affected our business. Our sales fell around 40 per cent in the past week," said Goo Wai Chien, who sells pizza and pasta at a hawker centre in Singapore's business district. "But hopefully the situation is improving."

Much depends on how long the haze lasts and which way the wind blows the smoke that is coming mostly from fires set on palm oil plantations on Indonesia's Sumatra island.

Singapore Prime Minister Lee Hsien Loong has said the haze, which eased over the weekend and on Monday in the city state, could last a few weeks or until the dry season ends in Sumatra in September or October.

Extinguishing the fires, which smoulder deep within peat, depends almost entirely on levels of rainfall.

Irvin Seah, DBS economist in Singapore, said the overall impact could be worse than in 1997 if the haze drags on.

"In 1997, the level of pollution was not this severe, and on the other hand the tourism industry's contribution to the economy was relatively smaller back then."

Tourism makes up 6.4 per cent of Malaysia's economy and about 5 to 6 per cent of Singapore's. Analysts see that sector taking an immediate knock, even if they cannot quantify the damage.

"The impact will be negative," ANZ, a bank, said in a research report, referring to Singapore. "Shopping, restaurants, bars and outdoor entertainment will all suffer during this hazy period."

Hotels, restaurants and other hospitality businesses also benefit from Singapore's prominence as a centre for industry meetings and trade shows.

TOURISM, HEALTH FEARS

Perceptions of Singapore, which usually enjoys clear skies and relatively little pollution, could be the biggest casualty if the smoke hangs over the island through September.

A conference this week on global nuclear issues with dozens of high-profile experts, including former US secretary of state George Shultz and former secretary of defence William Perry, was postponed "due to increasingly hazardous weather conditions in Singapore", the organisers said.

"It would create a very negative impression and also deter tourist inflows. It would deter people thinking about moving to work in Singapore," said P.K. Basu, regional head of research and economics at Maybank Kim Eng.

Brokerage CLSA has estimated the damage to Singapore - a major financial centre, aviation hub and tourism destination - could end up being hundreds of millions of dollars. Other analysts said it could top $1 billion.

Singapore and its $271 billion economy cannot afford a big hit from a prolonged pollution crisis or any loss of confidence.

The economy - which is dominated by services, followed by manufacturing and construction - was stronger than expected in the first quarter due to a surge in the financial sector.

But exports have been weak, especially electronics, and economists now expect growth of 2.3 per cent this year, slower than the median estimate of 2.8 per cent in March, according to the central bank's latest quarterly survey released this month.

Francis Tan, an economist at United Overseas Bank, said if the haze in Singapore extends until September, with pollution rising to unhealthy levels from time to time, it could shave 0.3 to 0.5 percentage points off his 2013 growth forecast of 3 per cent. That would mean up to $1.2 billion in economic losses.

Among the biggest costs that businesses face from the haze is illness.

Hospitals and clinics in areas badly affected by haze in recent days had recorded a rise of more than 100 per cent in asthma cases, Malaysia's director-general of health Noor Hisham Abdullah was quoted as saying by the Bernama state news agency.

Patients reporting other respiratory problems and conjunctivitis had also jumped, he said.

The Malaysian capital, Kuala Lumpur, was veiled in thick haze on Monday, a day after parts of the southern state of Johor declared an emergency as pollution readings rose above the hazardous level.

Cheah Tuck Wing, the executive director of the Malaysia-Australia Business Council, said companies in Johor - which has attracted growing investment from neighbouring Singapore - were already seeing a rise in worker sickness.

"People are not well and it will definitely affect production, that goes without saying. It has definitely impacted business, especially factories where a huge number of people are working."

 

[johnny333]

Really no different from connecting a tube to your car exhaust and sticking the other end into your mouth.

How was you Air Con installation? All sorted now?

Fortunately had the installation done BEFORE the haze problem started
Had it going non-stop during the haze crisis.

I opted for a Daikin & chose to upgrade the pipping to a 22 gauge. Replaced 3 indoor units for $4,300 .

 

[johnny333]

Nonsense. Sales of N95 masks, air purifiers and healthcare services will surely make up for weakness in other sectors of the economy.

Not likely. The haze problem caught many by surprise. Tried to get but found out many stores didn't have stocks of air purifiers, masks, and even the 3M filtrete filters,....

What the haze problem has shown is the incompetence of you know who

 

[greenies]

Nonsense. Sales of N95 masks, air purifiers and healthcare services will surely make up for weakness in other sectors of the economy.

I rather not to make profit from this kind of national crisis.
I would like to see distributing all health-related items and equipment such as masks and air purifiers FOC to all HDB houses and sell at their cost value throughout the country.
All healthcare sectors (hospitals, clinics, pharmacies etc.) shall be made available FOC to all patients having breathing problem, or haze inflicted problems.