Singapore economy contracts by 7pc in third quarterBusiness | 14 Oct 2020 9:21 am
The Singapore economy shrank at a slower place of 7 percent in the third quarter from the same period last year, following the phased reopening of the economy after the coronavirus "circuit breaker" period, Singapore's Channel News Asia reports.
This compares with an estimated 7.6 percent contraction by private-sector economists surveyed by the Monetary Authority of Singapore (MAS) last month.
This is also an improvement from the 13.3 percent contraction in the second quarter, advance estimates from the Ministry of Trade and Industry (MTI) showed on Wednesday.
On a quarter-on-quarter seasonally adjusted basis, the Singapore economy expanded by 7.9 percent in the third quarter, rebounding from the 13.2 percent contraction in the preceding quarter.
The manufacturing sector grew by 2 percent on a year-on-year basis in the third quarter, a reversal from the 0.8 percent contraction in the previous quarter.
MTI said growth was supported by output expansions in the electronics and precision engineering clusters, which were in turn driven by “robust global demand” for semiconductors and semiconductor manufacturing equipment.
On a quarter-on-quarter seasonally-adjusted basis, the manufacturing sector expanded by 3.9 percent, a turnaround from the 9.1 percent contraction in the second quarter.
The construction sector shrank at a slower pace of 44.7 percent on a year-on-year basis in the third quarter, after a 59.9 percent decline in the previous quarter.
Meanwhile, construction output in the third quarter remained weak on account of the slow resumption of construction activities due to the need for construction firms to implement coronavirus safe management measures.
On a quarter-on-quarter seasonally-adjusted basis, the construction sector grew by 38.7 percent, rebounding from the sharp contraction of 59.4 percent in the second quarter when most construction activities had to come to a stop due to the circuit breaker period and movement restrictions in the foreign worker dormitories.
Within services, aviation- and tourism-related sectors such as 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.
The services producing industries contracted by 8 percent on a year-on-year basis in the third quarter, extending the 13.6 percent decline in the previous quarter.
On a quarter-on-quarter seasonally-adjusted basis, the services producing industries expanded by 6.8 percent, a reversal from the 11.2 percent decline seen in the second quarter.
Other trade-related services sectors, such as wholesale trade, were also weighed down by weak external demand, said MTI.
Although consumer-facing sectors such as retail and food services saw an improvement in performance as the economy exited the circuit breaker, they remained in contraction, with sales volumes coming in below year-ago levels due to weak consumer confidence and capacity constraints resulting from safe distancing measures.
The finance and insurance as well as information and communications sectors recorded steady growth during the quarter.
Singapore has been in recession this year due to weak external demand and virus restrictions.
The economy is expected to shrink between 5 percent and 7 percent for the whole of 2020, according to MTI’s forecast in August. The MAS survey in September predicted a 6 per cent full-year fall.
Singapore’s overall unemployment rate grew to 3.4 percent in August, climbing past the high of 3.3 percent recorded in September 2009 during the global financial crisis.
MTI said the improved performance of the Singapore economy in the third quarter came on the back of the phased re-opening of the economy following the "circuit breaker" that was implemented between April 7 and June 1.
The advance GDP estimates are computed largely from data in the first two months of the quarter, in this case July and August. This is the first full quarter after Singapore exited the circuit breaker period. -Photo: CNA