Wed, Oct 14, 2020 - 8:33 AM
SINGAPORE'S third-quarter economic growth staged a rebound from the deep contraction seen during its "circuit-breaker" period but has continued to stay in negative territory, according to advance estimates released by the Ministry of Trade and Industry (MTI) on Wednesday.
Gross domestic product (GDP) grew by 7.9 per cent in Q3, on a quarter-on-quarter seasonally-adjusted basis, a stark reversal of the 13.2 per cent contraction clocked in Q2, when Singapore was on a partial economic shutdown due to the Covid-19 pandemic.
On a year-on-year basis, however, the economy shrank by 7 per cent in Q3, although this is an improvement from the 13.3 per cent contraction observed in Q2.
Q3's better performance came largely from the manufacturing sector, which expanded by 2 per cent year on year, undoing the 0.8 per cent contraction seen in Q2. Quarter on quarter, the manufacturing sector grew by 3.9 per cent on a seasonally-adjusted basis, bouncing back from Q2's 9.1 per cent contraction.
The manufacturing sector's gains came mostly from output expansions in the electronics and precision engineering clusters, which were in turn driven by robust global demand for semiconductors and semiconductor manufacturing equipment, MTI said.
Meanwhile, the construction sector shrank by 44.7 per cent on a year-on-year basis in Q3, extending the previous quarter's 59.9 per cent decline. However, on a quarter-on-quarter seasonally-adjusted basis, the construction sector grew by 38.7 per cent, a drastic turnaround from the sharp 59.4 per cent contraction in Q2.
The construction sector's weak year-on-year performance was attributed to the slow resumption of construction activities due to the need for construction firms to implement safe-management measures for a safe restart, MTI said.
The services-producing industries shrank by 8 per cent year on year in Q3, although this is an improvement of the 13.6 per cent decline in Q2.
Aviation and tourism-related sectors like air transport and accommodation continued to see significant contractions, as global travel restrictions and sluggish travel demand brought air travel and visitor arrivals to a near complete standstill, MTI said.
Although other trade-related services sectors such as wholesale trade were weighed down by weak external demand, consumer-facing sectors such as retail and food services saw an improvement in Q3 as Singapore gradually reopened its economy.
On a quarter-on-quarter seasonally-adjusted basis, the services sector grew by 6.8 per cent in Q3, up from the 11.2 per cent contraction in Q2.
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