Hopes rise as Singapore’s economy surges 5.9% in 3Q11

According to advance estimates from the Ministry of Trade and Industry, Singapore's economy expanded by 5.9% YoY in 3Q11, better than the 1.0% growth in 2Q11, and also higher than the street's expectations of a 5.6% expansion. On a seasonally adjusted QoQ annualized basis, the economy grew by 1.3%, a reversal from the 6.3% contraction in 2Q11.

Manufacturing expanded by 13.2% YoY after contracting by 5.8% in 2Q11, largely because of a surge in output in the biomedical manufacturing cluster, which more than offset a decline in the electronics cluster. Growth in the construction sector also slowed to 0.4% from 1.5% in 2Q11. As for services, growth was 3.6% in 3Q11 compared to 4.0% in the previous quarter. The MTI now expects Singapore's economy to expand by around 5.0% this year, at the lower end of the revised 5-6% forecast in Aug. This as the electronics cluster is expected to remain weak while the financial services sector may be weighed by economic and financial uncertainties. However, MTI adds that the biomedical manufacturing cluster could provide some support to growth.