Based on advance estimates by the MTI, Singapore’s economy grew by 1.7% YoY in 2Q15, slower than the 2.8% growth in 1Q15, as well as the street’s expectations of a 2.4% expansion. On a seasonally adjusted, annualised basis, the economy contracted by 4.6% QoQ, reversing the 4.2% growth in the preceding quarter. Manufacturing contracted by 14.0% QoQ, a reversal from the marginal 0.4% expansion in 1Q15.

There was a fall in output in the biomedical manufacturing and transport engineering clusters. Construction, which performed well in 1Q15 (8.3% QoQ growth), also saw a 0.2% contraction in 2Q15.  Services growth was also negative at -2.6% QoQ, compared to 1Q15’s 3.8% expansion. MTI’s 2015 growth forecast was 2.0-4.0% in the previous 1Q15 GDP release in May.

Source: OCBC Research - 14 Jul 2015