AI-fuelled manufacturing leads Singapore's 5.7% GDP growth in Q2 2026

Although growth eased from 6.3% in the previous quarter, Singapore's economy remained resilient as manufacturing surged 12.2% year-on-year, while most services sectors continued to expand.

Singapore's economy grew 5.7% year-on-year in the second quarter of 2026, according to advance estimates released by the Ministry of Trade and Industry (MTI).

Although this was slower than the 6.3% growth recorded in the first quarter, the economy continued to expand on a quarter-on-quarter seasonally adjusted basis, rising 1.1% after a 1.3% growth in the previous quarter.

Manufacturing posts fastest growth

Among all sectors, manufacturing remained the strongest performer, expanding 12.2% year-on-year in the second quarter, an increase from 8.0% in the previous quarter.

MTI attributed the stronger performance largely to higher output from the electronics and precision engineering clusters, supported by sustained AI-related demand for semiconductors and semiconductor manufacturing equipment.

By contrast, the chemicals and biomedical manufacturing clusters declined during the quarter. According to the ministry, the chemicals segment was affected by feedstock disruptions arising from the conflict in the Middle East.

On a quarter-on-quarter seasonally adjusted basis, the manufacturing sector grew 5.3%, reversing the 2.2% contraction recorded in the previous quarter.

Construction growth moderates

The construction sector expanded 6.2% year-on-year, easing from 12.9% in the first quarter.

Growth continued to be supported by higher public and private sector construction output. However, on a quarter-on-quarter seasonally adjusted basis, the sector contracted 2.1%, following 7.4% growth in the previous quarter.

Wholesale trade and transport sectors continue to expand

The wholesale & retail trade and transportation & storage sectors collectively grew 6.3% year-on-year, moderating from 9.3% in the first quarter.

In addition, all sectors within the group recorded growth.

Wholesale trade was supported by the machinery, equipment & supplies segment, in line with stronger electronics exports, while the transportation & storage sector was driven by growth in water transport.

Compared with the previous quarter, however, the group contracted 0.3% on a seasonally adjusted basis, reversing the 3.5% growth recorded in the first quarter.

Information & communications, finance, and professional services maintain momentum

The information & communications, finance & insurance, and professional services sectors expanded 3.9% year-on-year, following 4.5% growth in the previous quarter.

Growth in information & communications was supported by continued demand for IT and digital solutions, while professional services benefited from architectural & engineering, and technical testing & analysis services. Meanwhile, finance & insurance was led by the banking and insurance segments.

On a quarter-on-quarter seasonally adjusted basis, the group grew 1.7%, rebounding from the 3.5% contraction recorded previously.

Remaining services sectors record broad-based growth

The remaining services sectors, comprising accommodation & food services, real estate, administrative & support services, and other services industries, expanded 2.7% year-on-year, easing from 3.2% in the previous quarter.

All sectors registered growth except food & beverage services.

The real estate sector continued to expand on the back of steady developer activities, while growth in health & social services and education remained resilient.

On a quarter-on-quarter seasonally adjusted basis, the group grew 1.2%, slightly faster than the 1.0% growth recorded in the first quarter.

MTI said the preliminary GDP estimates for the second quarter, including detailed figures on sectoral performance, sources of growth, inflation, employment and productivity, will be released in the Economic Survey of Singapore in August 2026.

According to MTI, the latest advance estimates indicate that Singapore's economy remained on a steady growth path in the second quarter, supported by continued strength in manufacturing and broad-based expansion across most services sectors.

For the full GDP breakdown, read MTI's update here.

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