Singapore economy shrank 1.5 percent in the third quarter

Based on advance estimates Singapore economy shrank 1.5 percent in the third quarter 2012 but since second quarter number is revised up to 0.2 per cent expansion, there will be no technical recession (2 consecutive quarter-on-quarter GDP decline), yet:

Based on advance estimates,  the Singapore economy grew at a modest pace of 1.3 per cent on a year-on-year basis in the third quarter of 2012, compared to 2.3 per cent growth in the previous quarter. On a quarteron-quarter seasonally-adjusted annualised  basis, the economy contracted by 1.5 per cent, compared to the 0.2 per cent expansion in the second quarter.  

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 sector was significantly stronger at 14.3 per cent in the second quarter, compared to the preliminary estimates of 0.9 per
cent growth.[1]

Singapore Central Business District

In the third quarter, both manufacturing (largely due to the decline in output of the electronics cluster) and construction by -3.9% and  -7.5% respectively. Services Producing Industries expanded by 0.1. So it is obvious that construction, riding on the Singapore's property bubble and large public projects saved the year for growth: overall year-on-year GDP growth was 8.6% for construction while manufacturing expanded 0.7% and Services Producing Industries recorded 1.1% growth.

Since the massive Chinese stimulus lost its steam, Singapore's economy is losing steam also (and Western woes also do not help). For the rest of the year, Ministry of Trade and Industry (MTI) expects a sluggish growth 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.  

MTI will release the preliminary GDP  estimates for the third quarter in November 2012, including performance by sectors, sources of growth, inflation, employment and productivity, in its Economic Survey of Singapore. [1]

 [1] - Singapore remains on track to grow by 1.5 to 2.5 per cent in 2012 (pdf)