The manufacturing sector declined by 3.1 percent year-on-year in the June quarter, much sharper than a 0.3 percent contraction in the previous quarter, as output fell in the electronics, transport engineering and precision engineering clusters. In addition, wholesale & retail trade sector fell 3.2 percent, larger than a 2.5 percent decline in the previous quarter. The wholesale trade contraction was mostly visible in the machinery, equipment & supplies sub-segment while retail trade was dragged down by motor vehicular and non-motor vehicular sales.
In addition, output growth slowed noticeably for the accommodation & food services (0.9 percent vs 2 percent), information & communication (4.1 percent vs 5.2 percent), business services (0.5 percent vs 1.7 percent), and other services industries (2.1 percent vs 2.6 percent). Meanwhile, construction output expanded 2.9 percent, little-changed from a 2.8 percent gain in the first quarter. On the other hand, transportation & storage activity picked up (2.2 percent vs 0.7 percent), supported primarily by the air transport and water transport segments, which expanded on the back of an increase in air passengers handled at Changi Airport and total sea cargo volume handled at Singapore’s ports respectively. Also, finance & insurance sector grew much stronger (5.2 percent vs 3.2 percent), largely due to expansion in the fund management, foreign exchange trading, and others segments.
On a quarter-on-quarter seasonally-adjusted annualised basis, the economy shrank 3.3 percent, compared to the preliminary figure of a 3.4 percent contraction and reversing from a 3.8 percent growth in the first quarter. It was the steepest quarterly contraction since the 4.1 percent fall in the third quarter 2012 as output declined in manufacturing (-3.4 percent vs -5.4 percent), construction (-5.5 percent vs 13.7 percent), wholesale & retail trade (-7.9 percent vs 3.1 percent), business services (-3.9 percent vs 1.3 percent), and other services (-8 percent vs 15.3 percent). In addition, output growth slowed for information & communications (0.5 percent vs 2.8 percent). Conversely, finance & insurance activity grew much faster (7.6 percent vs 4.9 percent), while there was a rebound in both the output of transportation & storage (6.5 percent vs -2.1 percent), and accommodation & food services (2.3 percent vs -5.3 percent).
Meantime, amid escalations in global trade tensions and a struggling manufacturing sector, the Ministry of Trade and Industry (MTI) revised lower 2019 GDP growth forecasts to be in a range of zero to 1 percent from an earlier projection of 1.5 percent to 2.5 percent, with growth expected to come in at around the mid-point of the forecast range. The government also slashed its projection for 2019 non-oil domestic exports (NODX) to be in a range of -9 to -8 percent, down from the range of -2 to 0 percent on the back of trade's continued dismal performance.