Singapore’s economy grew more in the third quarter compared to the previous quarter, due to significant expansion in the manufacturing sector, according to advance estimates from the Ministry of Trade and Industry.
The city-state’s third-quarter GDP rose by 4.6 percent compared to the corresponding quarter a year ago, and was higher than the 2.9-percent growth in the previous quarter. The figure supersedes expert forecasts of a 3.8-percent growth.
The quarter-on-quarter seasonally adjusted annualized GDP for July-September rose by 6.3 percent, a marked increase from the second quarter’s 2.4 percent.
The manufacturing sector was the key driver of this growth—mainly due to expansions in the electronics, biomedical and precision engineering clusters—posting a 15.5 percent growth compared to the 8.5-percent growth in the preceding quarter.
The sector showed rapid growth in its quarter-on-quarter seasonally adjusted annualized growth rate, with a 23.1-percent growth compared to the 3.2-percent growth in Q2.
The services sector posted a year-on-year growth of 2.6 percent, close to the 2.5-percent growth in the previous quarter.
The advance estimates infuse much needed optimism into the Singapore economy. Disappointing GDP data from the third quarter of 2016 had convinced some analysts that a technical recession would follow. However, second-quarter results showed that Singapore had narrowly avoided a technical recession. Current readings point to a positive trend.
The turnaround in the services sector is a sign that Singapore’s economic recovery is broadening out, DBS analysts said in a report.
“Importantly, the services sector, which accounts for more than two-thirds of the economy (69.4%) has turned the corner,” they stated.
The construction sector shrank by 6.3 per cent on a year-on-year basis in the third quarter, extending the 6.8 per cent decline in Q2, due mainly to a decline in private sector construction activities.