Singapore: Economy slows in Q2 on weak manufacturing, but avoids contraction
August 12, 2014
According to detailed data, in the second quarter, the economy expanded 0.1% over the previous quarter at a seasonally adjusted annualized rate (SAAR). The reading came in well below the 1.8% expansion recorded in the previous quarter. However, it contrasted both the 0.8% contraction reported in the preliminary estimate and the 0.3% decline the market had expected. In annual terms, GDP expanded 2.4%, which halved the 4.8% growth tallied in the previous quarter (previously reported: +2.1% year-on-year).
Q2’s weak growth came on the back of a sharp decline in manufacturing, which tumbled from a 12.3% increase in the first quarter to a 15.2% contraction in the second quarter (previously reported: -19.4% quarter-on-quarter SAAR). The massive deceleration in manufacturing largely was due to a contraction in electronics output and slower growth in the transport engineering sector. Conversely, data showed strength in financial services, which accelerated from a 4.6% increase in the first quarter to an 11.6% expansion in the second quarter.
Author: Carl Kelly, Economist