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SINGAPORE \u2013 AI-related demand continued to drive Singapore\u2019s manufacturing output in the second quarter of 2026, primarily for electronics and precision engineering, but it was not enough to sustain the momentum of economic growth from the previous quarter.<\/p>\n
The Republic\u2019s economy expanded 5.7 per cent<\/span><\/a> year on year in the April to June period, slower than Q1\u2019s 6.3 per cent, according to the Ministry of Trade and Industry (MTI) on July 14. This expansion still surpassed the median forecast growth of 5.5 per cent by economists in a Bloomberg poll.<\/p>\n MTI said manufacturing during the quarter was largely driven by output increases in the electronics and precision engineering clusters because of strong AI-related demand for semiconductors and semiconductor manufacturing equipment, respectively.<\/p>\n But slower growth was observed in sectors such as construction as well as wholesale and retail trade.<\/p>\n Most analysts believe it would be difficult to outpace the growth Singapore\u2019s economy recorded in the first quarter unless the volatile energy markets calm down. The situation has grown more uncertain once again after the\u00a0recent flare-up of hostilities between the US and Iran,<\/span><\/a>\u00a0shattering\u00a0the 60-day ceasefire they agreed on in mid-June.<\/p>\n Crude oil prices, which had dropped to a low of US$71 a barrel after the ceasefire deal was announced, have rebounded to around US$81 a barrel on July 17, though still far from the peak of US$120 in the weeks after the conflict began on Feb 28.<\/p>\n