SINGAPORE - The Singapore economy grew by 2.5 per cent year-on-year in the second quarter, the same pace of growth as in the previous quarter, supported again by strong gains in manufacturing, advance estimates from the Ministry of Trade and Industry (MTI) showed on Friday (July 14).
Second-quarter growth came in slightly lower than the 2.7 per cent expected by analysts, after first quarter growth was revised down to 2.5 per cent from 2.7 per cent previously.
Compared to the first quarter, the economy expanded by 0.4 per cent in the three months to June, in contrast to the 1.9 per cent contraction in the previous quarter - thus dodging a technical recession as widely expected. But this missed the 1.1 per cent quarter-on-quarter growth expected by analysts.
The manufacturing sector expanded by 8 per cent on a year-on-year basis in the second quarter, extending the 8.5 per cent growth in the previous quarter. Growth was supported mainly by the electronics and precision engineering clusters, which saw robust expansions on the back of strong external demand for semiconductors and semiconductor manufacturing equipment respectively.
Quarter-on-quarter, the manufacturing sector grew by 2.4 per cent, an improvement from the 0.4 per cent growth in the preceding quarter.
The construction sector was again the main drag on the economy. It contracted by 5.6 per cent year-on-year, following the 6.1 per cent drop in the first quarter.
The sector was weighed down by a weakness in both private sector and public sector construction activities. Quarter-on-quarter though, the sector rebounded to grow by 4.3 per cent, compared to the 14.4 per cent contraction in the preceding quarter.
The services producing industries picked up slightly, growing by 1.7 per cent year-on-year, faster than the 1.4 per cent growth in the first quarter. Growth was supported primarily by the transportation & storage and business services sectors. Quarter-on-quarter, the services sector expanded by 0.4 per cent, a reversal from the 2.7 per cent contraction in the preceding quarter.
MAS managing director Ravi Menon reiterated two weeks ago that Singapore's export-reliant economy was forecast to grow by 1 per cent to 3 per cent this year, with a "strong likelihood" that growth would exceed last year's 2 per cent.
The advance GDP estimates are computed largely from data in the first two months of the quarter - in this case, April and May. They are intended as an early indication of GDP growth in the quarter and are subject to revision when more comprehensive data becomes available.