Singapore: Economy contracts in Q2 on weak manufacturing
July 14, 2014
According to an advance estimate released by the Ministry of Trade and Industry (MTI) on 14 July, in Q2 2014 the economy contracted at a seasonally adjusted annualized rate (SAAR) of 0.8% over the previous quarter. The contraction contrasted both the 1.6% expansion tallied in Q1 and the 2.4% rise the market had expected. GDP expanded 2.1% over the same period of last year in Q2 (Q1: +4.9% year-on-year).
Q2’s disappointing figure came on the back of a contraction in manufacturing, which plummeted 19.4% (Q1: +11.9% quarter-on-quarter SAAR). The deceleration in manufacturing was due to a contraction in electronics output and slower growth in transport engineering output. On the other hand, the construction sector grew 2.6% in the second quarter, which was an improvement over the 0.5% contraction tallied in the previous quarter. In addition, services grew 5.2% (Q1: -1.4% qoq SAAR).
Author: Dirina Mançellari, Senior Economist