S'pore economy contracts by 7.8% in Q2 with slowdown acrss sectors

Singapore: A slowdown across many sectors saw the Singapore economy grow by 0.5 per cent on a year-on-year basis, down from the 9.3 per cent growth seen in the previous quarter.

On a seasonally-adjusted quarter-on-quarter annualised basis, the economy contracted by 7.8 per cent, compared to the 27.2 per cent expansion in the previous quarter.

According to a Trade and Industry ministry release on the advance estimates, the largest contraction was in manufacturing which declined by 5.5 per cent in the second quarter of 2011, after a 16.4 per cent expansion in the previous quarter.

On a sequential basis, the sector contracted by an annualised rate of 22.5 per cent, a sharp reversal from the growth of 96.6 per cent seen in the preceding quarter.

This decline was largely impacted by the biomedical manufacturing cluster as companies switched to producing a different value-mix of active pharmaceutical ingredients during the quarter, as well as the electronics cluster which saw an easing in global demand for semiconductor chips.

Showing some moderation was growth in the services sector, despite healthy growth in the tourism-related sector such as hotels & restaurants due to strong visitor inflows.

The industry grew by 3.3 per cent year-on-year, compared to the 7.6 per cent growth in the preceding quarter.

On a sequential basis, the services producing industries declined by an annualised rate of 2.9 per cent, following the growth of 10.3 per cent in the preceding quarter.

This was largely due to declines in wholesale and retail trade, due to weaker trade flows during the quarter, as well as the financial services sectors which were dragged down by a fall in stock trading activities.

Although not as sterling as the preceding quarter, the construction sector posted 1.6 per cent growth on a year-on-year basis in Q2 2011, after posting 2.4 per cent growth in Q1.

The sector also saw a second consecutive quarter of growth on a sequential basis, at 13.8 per cent, due to increasing construction activities in the industrial building segment.

- CNA