Economic growth in the second quarter was better than expected, resulting in an upward revision of quarter-on-quarter annualised growth from the preliminary estimates of -0.7 per cent to 0.2 per cent. The revision was due to new data from the construction sector, which registered higher certified progress payments from private sector industrial and residential projects. As a result, growth of the construction sectorwas significantly stronger at 14.3 per cent in the second quarter, compared to the preliminary estimates of 0.9 per cent growth.
The pullback in quarter-on-quarter growth momentum in the third quarter was mainly due to contraction in the manufacturing sector. On a quarter over quarter basis, the sector declined by an annualised rate of 3.9 per cent, following the 0.1 per cent contraction in the preceding quarter. This largely reflected the decline in output of the electronics cluster. On a year-on-year basis, the manufacturing sector grew by 0.7 per cent compared to the 4.6 per cent increase in the second quarter.
For the rest of the year, growth could be weighed down by the subdued global economic conditions. Externally-oriented sectors such as manufacturing and wholesale trade will be affected by the slowdown in advanced economies. However, there will be modest support to growth from healthy expansion in the transport engineering cluster and construction sector. The Singapore economy remains on track to grow by 1.5 to 2.5 per cent in 2012.