Chart of the Day: Here's what to expect in Singapore's 2H13 economic numbers

Will growth moderate then?

According to J.P. Morgan, Singapore’s Advance GDP estimate suggested that the economy grew 15.2%q/q, saar in 2Q (J.P. Morgan 7.0%; consensus 8.1%) after a sluggish 1.8% print in 1Q.

The strong rebound in growth was due to a surge in manufacturing sector output though services and construction expanded at solid clips as well.

Here's more from J.P. Morgan:

We expect growth to moderate significantly in 2H as the manufacturing surge is not likely sustainable. Nevertheless, due to the strong 2Q growth print, we have raised our annual growth forecast to 3.8% from 2.7%.

Manufacturing surged 37.6%q/q, saar in 2Q after contacting 12.7% in 1Q. Such large swings are common in Singapore and like past swings, biomedical output, which is notoriously volatile, was a main driver (up 80.1%3m/3m, saar as of May).

But, electronics grew strongly too in 2Q, with production up 63.7% as of May. We do not expect the 2Q growth rate to persist. However, strong electronics output is a hopeful sign that growth may be stronger going forward than it was prior to the 2Q surge. Between 2Q12 and 1Q13, the economy averaged only 0.5% annualized growth.

Importantly, service and construction growth were solid as well in 2Q, each up 9.0%q/q, saar. Growth in both sectors will likely moderate in 2H after a strong 1H, but domestic activity should remain supportive of moderate GDP growth the rest of this year.

We expect some payback from manufacturing this quarter, which should weigh on 3Q GDP growth, while the economy is expected to grow near trend in 4Q. This would leave growth up 3.8% in 2013 versus the government’s forecast range of 1%-3%. We have also raised our 2014 growth forecast to 4.5% from 3.7% previously.