Singapore’s GDP contracts 12.6 percent in Q2

Based on advance estimates, the Singapore economy contracted by 12.6 per cent on a year-on-year basis in the second quarter of 2020, due to COVID-19 lockdown measures from 7 Apr to 1 Jun, as well as weak external demand amidst a global economic downturn precipitated by the pandemic. On a quarter-on-quarter seasonally-adjusted annualized basis, the economy shrank by 41.2 per cent in the second quarter.

The manufacturing sector grew by 2.5 per cent on a year-on-year basis in the second quarter, slower than the 8.2 per cent growth in the previous quarter. Growth during the quarter was primarily due to a surge in output in the biomedical manufacturing cluster. 

On the other hand, weak external demand and workplace disruptions during the lockdown period weighed on output in the chemicals, transport engineering and general manufacturing clusters. 

On a quarter-on-quarter seasonally-adjusted annualized basis, the manufacturing sector shrank by 23.1 per cent, a sharp reversal from the 45.5 per cent expansion in the preceding quarter.

The construction sector contracted by 54.7 per cent on a year-on-year basis in the second quarter, a significant deterioration from the 1.1 per cent decline in the previous quarter.

Construction output weakened on account of the lockdown measures which led to a stoppage of most construction activities during the period, as well as manpower disruptions arising from additional measures to curb the spread of COVID-19, including movement restrictions at foreign worker dormitories. 

On a quarter-on-quarter seasonally-adjusted annualized basis, the construction sector shrank by 95.6 per cent in the second quarter, far worse than the 12.2 per cent contraction in the preceding quarter.

The services producing industries contracted by 13.6 per cent on a year-on-year basis in the second quarter, steeper than the 2.4 per cent decline in the previous quarter. Within services, tourism-related sectors like accommodation and the air transport sector were severely affected by global and domestic travel restrictions, which brought visitor arrivals and air travel to a standstill. 

Other outward-oriented services sectors such as wholesale trade and water transport were adversely affected by a fall in external demand as many countries around the world grappled with the COVID-19 pandemic. Meanwhile, domestically-oriented services sectors such as food services, retail and business services were significantly affected by the lockdown measures. 

On a quarter-on-quarter seasonally- adjusted annualized basis, the services producing industries shrank by 37.7 per cent in the second quarter, extending the 13.4 per cent decline recorded in the preceding quarter.

Image credit: Hit1912 / Shutterstock.com

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