Singapore’s GDP up 5.7% in Q2 as manufacturing surges on AI-related demand

[SINGAPORE] The Republic’s economy expanded 5.7 per cent year on year (yoy) in the second quarter of 2026, easing from the previous quarter’s 6.3 per cent, advance estimates from the Ministry of Trade and Industry showed on Tuesday (Jul 14) morning.

On a seasonally adjusted quarterly basis, gross domestic product rose 1.1 per cent, extending the 1.3 per cent growth recorded in the first quarter.

The goods-producing industries accelerated sharply, expanding 10.4 per cent yoy, up from the 8.4 per cent growth in Q1.

Manufacturing output grew robustly by 12.2 per cent yoy in Q2, a marked acceleration from the 8 per cent expansion in the preceding quarter.

Growth was largely driven by output increases in the electronics and precision engineering clusters, on account of strong artificial intelligence-related demand for semiconductors and semiconductor manufacturing equipment, respectively.

The chemicals and biomedical manufacturing clusters contracted, with the former weighed down by feedstock disruptions arising from the ongoing conflict in the Middle East.

Sequentially, the manufacturing sector grew 5.3 per cent, a turnaround from the 2.2 per cent contraction in Q1.

The construction sector lost momentum, expanding 6.2 per cent yoy compared with the 12.9 per cent growth in the previous quarter. Both public and private-sector construction output supported the expansion during the period.

Quarter on quarter, construction output shrank by 2.1 per cent, a pullback from the 7.4 per cent growth in Q1.

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On the whole, the services-producing industries grew at a more measured pace of 4.6 per cent yoy, easing from the 6.2 per cent growth registered in Q1.

Within services, the wholesale and retail trade, and transportation and storage sectors collectively grew 6.3 per cent yoy, moderating from 9.3 per cent previously.

Growth in wholesale trade was driven by the machinery, equipment and supplies segment, in line with strong electronics exports growth, while the transportation and storage sector was led by the water transport segment.

The information and communications, finance and insurance, and professional services cluster maintained solid momentum, expanding 3.9 per cent yoy, easing slightly from 4.5 per cent in Q1. All constituent sectors posted gains, with information and communications, professional services, and banking and insurance driving the advance.

The group of sectors comprising accommodation and food services, real estate, administrative and support services, as well as other services grew 2.7 per cent yoy, easing from the 3.2 per cent expansion in Q1.

The real estate sector expanded on the back of steady growth in developer activities, while the F&B services sector contracted during the quarter.

On a sequential basis, the services-producing industries edged up 0.3 per cent, slowing from a growth of 2 per cent in Q1.