Singapore economy grows 3.7% in 2Q, boosted by services and manufacturing

People walking along Raffles Place. A rebound in factory output and strong expansion in services propelled Singapore's economy to significantly faster growth in the second quarter, beating economists' expectations. -- ST FILE PHOTO: ALPHONSUS CHERN
People walking along Raffles Place. A rebound in factory output and strong expansion in services propelled Singapore's economy to significantly faster growth in the second quarter, beating economists' expectations. -- ST FILE PHOTO: ALPHONSUS CHERN

A rebound in factory output and strong expansion in services propelled Singapore's economy to significantly faster growth in the second quarter, beating economists' expectations.

Gross domestic product rose 3.7 per cent in the April to June period over a year ago and increased 15.2 per cent from the first quarter, said the Trade and Industry Ministry on Friday morning.

This was an acceleration from the first quarter, when the economy grew a tepid 0.2 per cent from the same period last year and 1.8 per cent from the immediately preceding quarter.

Services, which accounts for about two-thirds of the economy, was again the major driver of growth. The sector expanded by 5 per cent in the second quarter over a year ago, up from the 2.7 per cent growth in the first quarter.

This was spurred mainly by wholesale and retail trade and transportation and storage services, the ministry said.

Manufacturing, which makes up about a fifth of the economy, grew 1.1 per cent in the second quarter from a year earlier, a reversal from the 6.9 contraction seen in the first quarter.

Quarter-on-quarter, the sector jumped 37.6 per cent in the second quarter, in contrast with the 12.7 per cent decline in the first quarter, said the ministry.

Construction, the third major prong of the economy, also continued to expand in the second quarter but at a slower pace. This segment grew 5.6 per cent over a year ago, down from the 6.8 per cent increase in the first quarter.

Economists had expected the economy to expand by 2 per cent in the second quarter over a year ago and 8.3 per cent over the first quarter, according to a poll by Reuters earlier this week.