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Manufacturing remains key growth driver in Q3; brighter outlook spurs broad expansion across sectors
THE manufacturing sector continued its run as the standout performer in the the third quarter, helping to lift Singapore's economic growth and the outlook for the coming year.
Factory output surged 18.4 per cent in the July to September quarter over the same period a year earlier, according to data out on Thursday from the Ministry of Trade and Industry (MTI).
All manufacturing clusters expanded, with the exception of transport engineering which continued to shrink on the back of sustained weakness in the marine and offshore engineering segment.
Manufacturing's stellar showing was a key driver behind third-quarter economic growth, which came in at 5.2 per cent - way ahead of previous estimates of a 4.6 per cent expansion.
The MTI also bumped up its forecast for full-year economic growth, which is now expected to come in between 3 per cent and 3.5 per cent, from 2 per cent to 3 per cent previously.
It also expects a more robust showing next year due largely to an improving global outlook. Growth in 2018 is expected to come in between 1.5 per cent and 3.5 per cent.
A brighter global outlook and strong demand for electronics has given the manufacturing sector, which makes up a fifth of the economy, a shot in the arm this year.
Most other sectors also expanded in the third quarter, in particular trade-driven industries.
The finance and insurance sector grew 5.9 per cent year-on-year, up from 4.2 per cent in the second quarter. This came on the back of robust growth in financial intermediation, insurance and fund management activities.
Meanwhile, the wholesale and retail trade sector expanded 2.2 per cent, similar to 2.1 per cent in the preceding three months. Growth was driven mainly by the wholesale trade segment, in line with the expansion in Singapore's non-oil exports.
The transportation and storage sector grew at a faster pace of 4.6 per cent year-on-year, compared with the 3.4 per cent expansion in the second quarter. The sector's growth was supported by the water transport and air transport segments, which saw improvements in sea cargo and air passengers handled respectively.
However, the construction sector continued its run as the worst performer, shrinking 7.6 per cent after falling 9.1 per cent in the preceding quarter. This came on the back of weak public and private sector construction activities.