Singapore economy grows 0.6% year-on-year in Q3, shrinks 4.1% over previous quarter

The office crowd in the Central Business District (CBD) of Singapore.
The office crowd in the Central Business District (CBD) of Singapore. PHOTO: ST FILE

SINGAPORE - The Singapore economy grew a meagre 0.6 per cent in the July to September period compared with a year ago, according to advance estimates from the Ministry of Trade and Industry (MTI).

This was sharply lower than economists' estimates of 1.7 per cent growth.

Compared with the preceding quarter, the economy shrank 4.1 per cent - a worse showing than economists' forecasts of zero per cent growth.

Minister for Trade and Industry (Trade) Lim Hng Kiang warned earlier this week that the Singapore economy could see some quarters of negative growth.

The Government in August shaved its 2016 growth forecast to between 1 and 2 per cent from its previous outlook of 1-3 per cent.

Advance estimates take into account data from the first two months of the quarter - the final statistics are due out next month.

The data out on Friday showed that manufacturing and services were the main drags on growth.

The manufacturing sector, which makes up a fifth of the economy, shrank 1.1 per cent in the third quarter from a year ago due to declines in transport engineering, biomedical manufacturing and general manufacturing.

The sector's output plunged 17.4 per cent in the quarter compared with the preceding three months. This was a sharp reversion from the previous quarter's 2.1 per cent expansion.

Meanwhile, services - which makes up two-thirds of the economy - recorded a 0.1 per cent contraction, compared with 1.2 per cent growth in the previous quarter. Growth was weighed down mainly by the wholesale and retail trade sector.

The construction industry was the only one that logged an uptick in output, growing 2.5 per cent from 2.6 per cent the preceding quarter.