Singapore Q2 GDP Falls 7.8% On Quarter

Singapore's gross domestic product declined by a seasonally adjusted annualized 7.8 percent in the second quarter of 2011 compared to the previous three months, the Ministry of Trade and Industry said on Thursday in an advance estimate. That was significantly lower than analyst expectations for a 1.9 percent quarterly decline following the 27.1 percent surge in the first quarter of this year.

On a yearly basis, GDP added 0.5 percent - again shy of expectations for a 1.5 percent gain following the 9.3 percent increase in the first quarter.

The manufacturing sector was a key drag, falling 22.5 percent on quarter and 5.5 percent on year after jumping 16.4 percent on quarter and 96.6 percent on year in Q1.

"This largely reflected a decline in the biomedical manufacturing cluster, as some companies switched to producing a different value-mix of active pharmaceutical ingredients during the quarter," the MTI said in a statement accompanying the data. "Output in the electronics cluster also fell, partly due to an easing in global demand for semiconductor chips."

The construction sector added 1.6 percent on year in the second quarter, following the growth of 2.4 percent in the previous quarter. On a sequential basis, the sector jumped 13.8 percent after adding 13.3 percent in Q1. This was largely due to increasing construction activities in the industrial building segment, the ministry said.

Growth in the services producing industries moderated, the data showed. Services producing industries grew 3.3 percent on year, compared to the 7.6 percent growth in the preceding quarter. On a sequential basis, the services producing industries eased by an annualized rate of 2.9 percent after climbing 10.3 percent in the preceding quarter.

This was largely due to declines in the wholesale and retail trade and financial services sectors. The former was negatively affected by weaker trade flows during the quarter, while the latter was dragged down by a fall in stock trading activities.

In contrast, tourism-related sectors such as hotels and restaurants continued to register healthy growth due to strong visitor inflows.

Upon the release of the data, the Singapore dollar slipped slightly against the U.S. dollar, dropping to 1.2178 versus the greenback from a recent multi-year high of 1.2155. (RTT News)