14-7-2023 (SINGAPORE) Singapore’s economy showed signs of recovery as it grew by 0.7% year-on-year in the second quarter of 2023, according to advance estimates released by the Ministry of Trade and Industry (MTI). This growth rate was faster than the 0.4% recorded in the previous quarter, offering optimism for the city-state’s economic outlook.
On a quarter-on-quarter seasonally-adjusted basis, Singapore’s economy expanded by 0.3%, marking a turnaround from the 0.4% contraction experienced in the first quarter. This positive growth prevented the country from slipping into a technical recession, which is defined as two consecutive quarters of negative growth.
The advance GDP estimates for the second quarter are based on data primarily from April and May, providing an early indication of economic performance that will be subject to revision as more comprehensive data becomes available.
The manufacturing sector, however, continued to face challenges with weak performance. It contracted by 7.5% year-on-year in the second quarter, a further decline from the 5.3% contraction in the previous quarter. Output declines were observed across all manufacturing clusters, except for the transport engineering cluster, according to the MTI. On a quarter-on-quarter seasonally-adjusted basis, the sector contracted at a slower pace of 1.3% in Q2, compared to a 4.5% contraction in the preceding quarter.
In contrast, the construction sector saw growth, expanding by 6.6% year-on-year in the second quarter, building on the 6.9% growth recorded in the first quarter. This growth was driven by expansions in both public and private sector construction output. On a quarter-on-quarter seasonally-adjusted basis, the sector experienced even stronger growth of 2.6% in Q2, accelerating from the 0.3% growth in the preceding quarter.
Among the services sectors, the wholesale and retail trade, as well as transportation and storage sectors, collectively grew by 2.6% year-on-year in the second quarter. This marked a turnaround from the 0.7% contraction in the previous quarter, with all sectors within this group experiencing expansion. The transportation and storage sector’s growth was primarily driven by the water and air transport segments, while the wholesale trade sector saw growth in the machinery, equipment & supplies, and fuels and chemicals segments. On a quarter-on-quarter seasonally-adjusted basis, the sectors as a group expanded by 3.4% in Q2, rebounding from a 0.5% contraction in the preceding quarter.
Finally, the group of sectors comprising information and communications, finance and insurance, as well as professional services, grew by 1.5% year-on-year in the second quarter, building on the 1.3% growth in the previous quarter.
