Singapore's gross domestic product contracted a seasonally adjusted 0.7 percent in the second quarter of 2012 compared to the previous three months, the Ministry of Trade and Industry said on Friday.
That's an improvement from last month's advance reading that called for a 1.1 percent contraction. GDP was up 9.5 percent in the first quarter.
GDP was down 2.5 percent on quarter in Q4 2011, up 1.5 percent in the third quarter and up 0.9 percent in Q2.
On a yearly basis, GDP was up 2.0 percent, up from the 1.9 percent advance reading and also up from the 1.5 percent increase in the previous three months.
The manufacturing sector was the key detriment as it contracted 0.5 percent on quarter after surging a revised 20.8 percent in the previous three months. The sector climbed 4.5 percent on year.
"The pull-back in quarter-on-quarter growth was largely due to the decline in externally-oriented sectors such as electronics manufacturing, as well as wholesale trade and tourism-related services," the MTI said in a statement accompanying the data. "Growth in the electronics cluster remained weak, while the transport engineering and biomedical manufacturing clusters provided growth support."
The construction sector added 5.3 percent on year, slowing from the 6.9 percent growth in the preceding quarter. On a sequential basis, the sector decelerated to 0.9 percent from 27.9 percent in the preceding quarter, largely due to a slowdown in construction activities in the institutional and others segment, the ministry said.
The wholesale and retail trade sector contracted 0.4 percent on year, following the 0.3 percent decline in the previous quarter. On a quarter-on-quarter basis, the sector contracted by an annualized rate of 0.4 percent, mainly due to the deterioration in the wholesale trade segment. The transportation & storage sector grew at a moderated pace of 1.6 percent on year, and 7.2 percent on quarter.
Growth in the finance and insurance sector was flat at 0.1 percent on year, down from 0.5 percent in the preceding quarter. On a quarter-on-quarter basis, the sector grew at 2.1 percent (annualized), largely due to continued sluggishness in sentiment-sensitive activities such as stock market trading, the MTI said.
While the business services sector added 3.0 percent on year, it was down 3.0 percent (annualized) on quarter as economic uncertainty weighed down on business and management consultancy activities.
Upon the release of the data, the Ministry of Trade and Industry narrowed its GDP growth forecast for 2012 to 1.5 to 2.5 percent; originally, it was 1.0 to 3.0 percent.
"Given the macroeconomic backdrop, the growth outlook for the Singapore economy remains cautious," the MTI said. "Externally-oriented sectors, in particular electronics, wholesale and tourism-related services, will be affected by the slowdown in advanced economies. Continued uncertainties in the external environment will also weigh down on sentiment-sensitive segments within the finance and insurance sector. Nonetheless, there will be modest support to growth from healthy expansion in the transport engineering cluster and construction sector."
by RTT Staff Writer
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