Singapore’s gross domestic product (GDP) grew by 14.3% on a y-o-y basis in the 2Q2021, according to advanced estimates released by the Ministry of Trade and Industry (MTI) on July 14.
This follows the 1.3% GDP growth y-o-y recorded in the previous quarter.
The strong growth was largely due to the low base in the 2Q2020 when GDP fell by 13.3% due to the Circuit Breaker (CB) measures implemented from April 7 to June1, 2020.
In absolute terms, GDP in the 2Q2021 remained 0.9% below its pre-pandemic level in the 2Q2019.
On a q-o-q seasonally-adjusted basis, the Singapore economy contracted by 2% in the 2Q2021, a reversal from the 3.1% growth in the preceding quarter.
The construction sector showed the biggest turnaround, expanding 98.8% on a y-o-y basis compared to the 23.1% contraction in the 1Q2021. MTI attributes this to low base effects arising from the CB measures in the 2Q2020, which stopped most construction activities.
In absolute terms, the value-added of the sector remained 31.6% below its pre-pandemic level. On a q-o-q seasonally-adjusted basis, the construction sector shrank by 11% in the 2Q2021, a reversal from the 4.5% growth in the previous quarter.
The manufacturing sector grew by 18.5% on a y-o-y basis in the 2Q2021, extending the 11.3% growth in the 1Q2021. Growth was supported by output expansions in all clusters except for the biomedical manufacturing cluster. In particular, the electronics and precision engineering clusters continued to see healthy expansions due to robust global demand for semiconductor and semiconductor equipment respectively.
On a q-o-q seasonally-adjusted basis, the manufacturing sector contracted by 1.8%, a pullback from the 11.4% expansion in the first quarter.
Among the services sectors, the wholesale & retail trade and transportation & storage sectors grew by 9.3 % in the 2Q2021, reversing the 1.7% contraction in the previous quarter. All sectors within this group of sectors expanded during the quarter.
Growth of the retail and transportation & storage sectors, in particular, was supported by a low base as strict domestic and border restrictions during the CB had led to a sharp decline in activity in these sectors in the 2Q2020.
On the whole, the value-added of this group of sectors remained 6.8% below its pre-pandemic level. On a q-o-q seasonally-adjusted basis, the sectors contracted by 0.4 % in the 2Q2021, in contrast to the 3.4 % growth recorded in the 1Q2021.
See also: Economists expect Singapore GDP to grow by 6.5% in 2021: MAS survey
Meanwhile, the information & communications, finance & insurance and professional services sectors collectively expanded by 7.8 % in the 2Q2021, extending the 3.2 % growth in the preceding quarter.
All sectors in this group recorded expansions. The growth of the professional services sector was partly due to the low base caused by the CB last year, even as weak economic activity in the region and sluggish domestic construction activity continued to weigh on the sector during the quarter. On a q-o-q seasonally-adjusted basis, the sectors in the group grew by 0.4 % in the 2Q2021, a reversal from the 1.2 % contraction seen in the previous quarter.
The remaining group of services sectors, comprising accommodation & food services, real estate, administrative & support services and other services sectors, expanded by 13.4% in the 2Q2021, a turnaround from the 3.8% contraction in the previous quarter. Most sectors within the group grew on the back of a low base in the 2Q2020 to the CB.
On the whole, the value-added of this group of sectors remained 11.8% below its level in the 2Q2019. In particular, the recovery of the food services and other services sectors in the 2Q2021 was weighed down by the tightening of restrictions during Phase 2 (Heightened Alert), such as the prohibition of dining-in and reduction in the operating capacity of attractions.
On a q-o-q seasonally-adjusted basis, the sectors in the group contracted by 3% in the 2Q2021, extending the 1.3% contraction in the preceding quarter.
MTI has maintained the official GDP growth forecast for 2021 between 4-6% and highlighted that a revision to its full-year growth outlook will be made in August.
Photo: Bloomberg
