Singapore: Q3 GDP growth likely moderated – Standard Chartered

Analysts at Standard Chartered expect Singapore’s Q3 GDP report which is due to be released on 12 October 2018 to show that growth to have moderated to 2.2% y/y from 3.9% in Q2, due to high base effects.

Key Quotes

“Manufacturing sector growth likely eased from the robust 10.2% y/y growth in Q2. July-August 2018 industrial production expanded 5% y/y and the September print faces an unfavourable base effect. Furthermore, PMIs have moderated since the start of 2018. Headline PMI growth eased to 0.8% y/y in September 2018, the lowest in 26 months, while electronics PMI contracted 4.1% y/y – the fifth consecutive month of y/y decline.”

“Services sector growth may also have eased from 2.8% y/y in Q2 on moderating financial market activity but likely remained firm, supported by still-robust loan growth. Better labour market conditions also probably helped support domestic spending. Meanwhile, the construction sector likely continued to contract y/y for the ninth consecutive quarter, although we expect the pace of contraction to have eased.”

“Our GDP growth tracker suggests upside risk to our Q3 GDP growth forecast. Our tracker is more reliant on readily available externally-driven activity data, such as IP, which continues to grow at a faster pace (albeit moderating) than domestic-oriented sectors. We are cautious about being overly optimistic, as the recovery in the services sector is still nascent.”