Strong AI-related demand for semiconductors and semiconductor manufacturing equipment drove Singapore’s manufacturing sector to 12.2 percent year-on-year growth in the second quarter of 2026, accelerating from 8.0 percent in the first quarter and powering the broader economy to 5.7 percent overall growth.

Singapore’s Ministry of Trade and Industry released the figure on Tuesday. The 5.7 percent growth in Q2/2026 is lower than 6.3 percent in Q1/2026, but higher than all quarterly figures in 2025.

Output increases in the electronics and precision engineering clusters, fueled by global demand for AI infrastructure, were the primary drivers of manufacturing growth. On a quarter-on-quarter seasonally adjusted basis, manufacturing grew 5.3 percent, a sharp turnaround from the 2.2 percent contraction in the first quarter. The AI-driven momentum also lifted the wholesale trade sector, where the machinery, equipment, and supplies segment grew in line with strong electronics exports.

The technology tailwind extended into services, with the information and communications sector bolstered by continued strong demand for IT and digital solutions, contributing to a 3.9 percent year-on-year expansion across the combined information and communications, finance and insurance, and professional services group.

However, the chemicals and biomedical manufacturing clusters contracted, with the former affected by feedstock disruptions arising from the conflict in the Middle East. The overall economy eased from 6.3 percent growth in the first quarter, while on a quarter-on-quarter seasonally adjusted basis, the economy expanded 1.1 percent, extending the 1.3 percent growth in the previous quarter.

The construction sector expanded 6.2 percent year-on-year, supported by increases in both public and private sector output. The remaining services group including accommodation, food services, and real estate grew 2.7 percent, with all sectors registering growth except food and beverage services.

Maybank expects demand from AI-related fields to remain strong in Singapore