Singapore tracks GDP growth of 0.7% on a year-on-year basis, an increase from 0.4% in Q1 2023

Construction, services and information communications sectors showed growth, while manufacturing and finance & insurance sectors shrank.

Based on advance estimates computed largely from data in the first two months of the quarter, i.e. April and May 2023, the Singapore economy grew by 0.7% on a yearly basis in Q2 2023, faster than the 0.4% growth recorded in Q1.

On a quarterly seasonally-adjusted basis, the Singapore economy expanded by 0.3%, a turnaround from the 0.4% contraction in the first quarter of 2023. In a press release by the Ministry of Trade and Industry (MTI) on 14 July 2023 (Friday), it reveals data on Singapore's economic growth from a yearly and quarterly basis.

Growth witnessed in various sectors

The manufacturing sector shrank by 7.5% year-on-year in the second quarter of 2023, worsening from the 5.3% contraction in Q1 2023. This deterioration was a result of output declines across all manufacturing clusters, apart from the transport engineering cluster. On a quarter-on-quarter seasonally-adjusted basis, the sector shrank at a slower pace of 1.3% in the second quarter, compared to the 4.5% contraction in the following quarter.

On the other hand, the construction sector showed growth of 6.6% year-on-year in the second quarter, continuing from the 6.9% growth in the first quarter. This positive growth was supported by expansions in both public and private sector construction output. On a quarter-on-quarter seasonally-adjusted basis, the sector expanded by 2.6% in the second quarter, accelerating from the 0.3% growth in the preceding quarter.

Among the services sectors, the wholesale & retail trade and transportation & storage sectors collectively grew by 2.6% year-on-year in the second quarter, a turnaround from the 0.7% contraction in the previous quarter. Within the group, all sectors expanded during the quarter, as growth in the transportation & storage sector was mainly supported by the water and air transport segments, while growth in the wholesale trade sector was driven by the machinery, equipment & supplies and fuels & chemicals segments.

On a quarter-on-quarter seasonally-adjusted basis, the sectors as a whole expanded by 3.4% in the second quarter, rebounding from the negative 0.5% growth in the preceding quarter.

Regarding the remaining group of services sectors such as accommodation & food services, real estate, administrative & support services, they grew by 6.1% year-on-year in the second quarter, extending the 7.1%  growth in the previous quarter, and this growth was consistent for all sectors within the group. In particular, the accommodation sector saw robust growth in tandem with the strong recovery in international visitor arrivals. On a quarter on-quarter seasonally-adjusted basis, the sectors in the group collectively expanded by 0.1% in the second quarter, moderating from the 1.9% growth in the first quarter.

Similarly, growth was observed in the group of sectors comprising the information & communications, finance & insurance and professional services sectors, where they grew by 1.5% year-on-year in the second quarter, following the 1.3% growth in the previous quarter. Within the group, all sectors except for the finance & insurance sector expanded during the quarter.

Growth in the information & communications sector was supported by a continued strong demand for IT and digital solutions, while growth in the professional services sector was largely boosted by the other professional, scientific & technical services and architectural & engineering, technical testing & analysis segments. Meanwhile, the finance & insurance sector contracted due to the weak performance of the insurance and banking segments.

On a quarter-on-quarter seasonally-adjusted basis, this group of sectors expanded by 1.7% in the second quarter, a reversal from the 1.6% contraction in preceding quarter.

MTI also announced that the preliminary GDP estimates for the second quarter of 2023, including performance by sectors, sources of growth, inflation, employment and productivity, will be released in the Economic Survey of Singapore in August 2023.

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