Services and construction drive stronger-than-expected expansion as manufacturing output stagnates.
Singapore’s economy grew 2.9 per cent year-on-year in the third quarter of 2025, surpassing forecasts despite a slowdown from the previous quarter’s 4.5 per cent rise, according to advance estimates from the Ministry of Trade and Industry (MTI).
Growth Outpaces Forecasts Despite Moderation
The 2.9 per cent expansion exceeded the 2 per cent median forecast by private-sector economists polled by Bloomberg. On a seasonally adjusted quarter-on-quarter basis, GDP rose 1.3 per cent, a slight dip from the 1.5 per cent increase in Q2. The moderation came mainly from a sharp slowdown in goods-producing industries, which grew just 0.6 per cent year-on-year compared to 4.8 per cent previously.
Manufacturing Stagnates Amid Global Headwinds
Manufacturing output was largely flat in Q3, weighed down by contractions in biomedical and general manufacturing clusters. Gains in electronics and transport engineering were not enough to offset these declines. Analysts attribute the weakness to soft global demand and ongoing supply chain adjustments across Asia. Sequentially, however, the sector rebounded by 6.1 per cent, reversing the 0.7 per cent contraction seen in Q2 — a sign of tentative recovery momentum.
Construction Sector Slows After Strong Gains
The construction industry grew 3.1 per cent year-on-year, easing from the 6.2 per cent expansion recorded in Q2. Both public infrastructure projects and private-sector developments continued to contribute positively, though overall momentum slowed. Quarter-on-quarter, construction output fell 1.2 per cent, following a robust 6.5 per cent surge earlier in the year.
Services Sector Anchors Economic Growth
The services-producing industries proved to be the economy’s key driver, expanding 3.5 per cent year-on-year. Within the sector, wholesale and retail trade, as well as transportation and storage, collectively grew 2.5 per cent, supported by water and air transport activity. Meanwhile, the information and communications, finance and insurance, and professional services cluster maintained steady momentum, expanding 4.4 per cent compared to 4.3 per cent in Q2.
Resilience in Hospitality and Real Estate
A separate group of sectors — including accommodation, food services, real estate, and administrative support — grew 4.1 per cent year-on-year, slightly improving from 4 per cent in Q2. The accommodation sector benefited from a rise in international visitor arrivals, while food and beverage services saw modest declines. On a sequential basis, the services-producing industries edged up 0.2 per cent, a slowdown from 1.7 per cent previously.
Policy Steady as Economy Adjusts
The Monetary Authority of Singapore (MAS) has kept its monetary policy unchanged, maintaining the current rate of appreciation for the Singapore dollar nominal effective exchange rate (S$NEER) band. MTI noted that the current data is preliminary, based on July and August performance, and will be revised in November when more detailed statistics become available.
Singapore’s stronger-than-expected GDP growth underscores the resilience of its services and construction sectors, even as manufacturing faces external headwinds. For regional observers in Indonesia and the wider SIJORI corridor, the data reaffirms Singapore’s economic agility amid global trade uncertainties — positioning it as a steady anchor in Southeast Asia’s recovery landscape.
Sources: The Business Times (2025) , EconoTimes (2025)
Keywords: Singapore GDP, Economic Growth, Manufacturing Slowdown, Services Sector, Monetary Authority
