Recent economic investigations published by the Ministry of Trade and Industry in Singapore reveal a notable acceleration in the island nation’s economic growth during the third quarter of this yearPreliminary estimates indicate that the Gross Domestic Product (GDP) grew by 4.1% year-on-year, a significant increase compared to the previous quarter’s 2.9%. When adjusted for seasonal variations, the GDP saw a quarter-on-quarter growth of 2.1%, once again surpassing the modest 0.4% growth experienced in the second quarter.

One of the most compelling drivers of this robust economic performance is the substantial recovery in Singapore's manufacturing output, which registered a remarkable 7.5% increase year-on-year during the third quarterThis figure represents a significant rebound from the 1.1% decline reported in the second quarter, marking it as a key contributor to the GDP’s swift growth

Notably, all manufacturing sectors, except for biopharmaceuticals, reported year-on-year growth in outputWhen seasonal adjustments were made, the manufacturing output surged by 9.9% quarter-on-quarter, a stark contrast to the previous quarter's 1.2% decline.

Market analysts attribute this increase in manufacturing productivity to several factors, notably the rise in external demandThe continuing recovery in the electronics sector, characterized by increases in orders, production, and exports, plays a pivotal role in generating this growthThe electronics sector, which constitutes the largest portion of the manufacturing output, experienced a year-on-year increase in July of 2.8%, reversing the 6.7% drop documented in JuneThe figures further improved in August, displaying a staggering 49.1% increase compared to the previous year, significantly above the July growthAmong the standout performers, semiconductor products recorded a remarkable 54.6% growth during this period.

As the electronics sector thrived, overall manufacturing output saw a strong rebound, with July witnessing a 1.8% year-on-year increase, a reversal from a 4.3% decline in June, ultimately exceeding market expectations

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August’s figures were even more promising, with manufacturing output surging 21%, far surpassing the expected 8.9% growth and marking the fastest growth rate since mid-2021. Analysts are optimistic that with the global demand continuing to recover, the electronics sector's positive momentum may extend into the final quarter of this year and possibly into the first quarter of the next.

Moreover, a report from the Singapore Institute of Purchasing and Materials Management indicates that the Purchasing Managers' Index (PMI) for the manufacturing sector made a modest increase of 0.1 points to reach 51.0 in SeptemberThis marks the 13th consecutive month in the expansionary zone and signifies the highest level attained since July 2021. According to Cai Han Ting, an economist at DBS Bank, Singapore's PMI performance stands relatively strong when compared to other exporting nations in the region, suggesting a favorable outlook for Singapore’s manufacturing sector in the remainder of 2024.

In addition to the steady growth in manufacturing, the revival of non-oil domestic exports (NODX) has also played a crucial role in bolstering Singapore's economy

After five consecutive months of decline, NODX saw a robust recovery in July, soaring by 15.7% year-on-year, effectively reversing the 8.8% drop recorded in June, with this being the first expansion since January of this yearIn August, however, the growth rate of NODX eased to 10.7%, falling short of July's surgeAlthough the growth continued into September, it softened at 2.7%, still registering positive growth for three straight months.

On the other hand, the services sector experienced a more tempered growth of 3.3% year-on-year in the third quarter, reflecting a slowdown compared to the first two quarters of the yearVarious subsectors, including wholesale and retail trade, transport and storage, also exhibited reduced growth, with contributions estimated at 3.5%, down from 3.9% in the second quarterThe construction sector similarly saw slower growth, registering a 3.1% increase compared to a more robust 4.8% in the earlier quarter

Sectors such as information and communication, finance and insurance, and professional services posted a 4.3% growth, underperforming compared to second-quarter figures.

As of mid-October, the quarterly GDP growth figures released by the Singapore government reflect an increase of 3.0% in the first quarter, 2.9% in the second quarter, and an impressive 4.1% in the third quarterTaking into account various domestic and international influences on economic growth, it is highly likely that Singapore will exceed a 3% annual GDP growth rate, barring any unexpected downturns in the fourth quarter.

The consistently positive economic performance during the first three quarters has led some economists to revise their annual growth projections for Singapore, raising it from the previous estimate of 3% to 3.5%. This adjustment also surpasses the Ministry of Trade and Industry’s forecast of a modest growth range of 2% to 3% for the entire year