Overachieving services sector to the rescue as Singapore once again dodges technical recession

3Q15 GDP grew by 1.9%, said the MTI.

The city-state has had its fair share of near misses of technical recession recently, but none more convincingly than this quarter’s close call, as the GDP transcended the estimated 0.1% growth considerably.

Thanks to an unexpected surge in the services sector, that is. According to analysts from OCBC, the services sector grew 3.5% qoq after a marginal 0.2% contraction last quarter, buttressed by the accommodation and food services segment.

“The Singapore economy grew by 1.9% YoY in 3Q15, slower than the 2.0% growth in 2Q15, but better than the street’s expectations of a 1.4% expansion. On a seasonally adjusted annualized basis, the economy expanded by 1.9% QoQ, a reversal from the 2.6% contraction in 2Q15,” OCBC said.

However, an anemic manufacturing sector continues to bottleneck Singapore’s growth, contracting by 4.6% qiq this quarter after dropping by 17.3% last quarter, due to weaker performances from the transport engineering, electronics and precision engineering clusters.

“Construction also contracted 1.6% in the quarter, after a good 13.4% expansion in 2Q15,” OCBC added.