Belt-tightening is just one of many signs that not all is well with the Singapore economy.

On paper, it is chugging along as is expected of a mature and developed economy.

It grew 2.2 per cent from April to June, according to flash estimates by the Singapore government, faster than the 2.1 per cent recorded over the same period last year. And manufacturing expanded 0.8 per cent in the second quarter, reversing six successive quarters of declines.

But dig deeper and there are signs of an economy fast losing steam in the face of an uncertain global outlook, said Mizhuo Bank economist Vishnu Varathan.

A large chunk of the uptick in manufacturing was due to a sudden surge in the volatile biomedical sector, which produces drugs in Singapore, he noted. “The manufacturing sector, stripping out biomedicals, is pretty much in a recession,” Varathan said.

Last week’s purchasing manager’s index, a survey of factory owners, confirmed the sputter in manufacturing. It was 49.3, down from 49.6 in June, and readings below 50 indicate contraction. This was the 13th straight month of contraction.

Oil and gas, which typically service the offshore marine sectors, have been among the worst performers.

And while Singapore giants such as Keppel Corp and SembCorp Marine have held up, the smaller oil and gas firms have struggled to stay afloat, with at least one going under. Last month, listed oil and gas company Swiber Holdings filed a judicial management order, collapsing under US$1.43 billion dollars of debt, with assets of just US$1.99 billion.

The bad news turned worse when Singapore’s largest bank, DBS, said it had S$700 million in exposure to Swiber, raising questions about the financial sector’s strength and its ability to keep bad debts under control.

A report by stockbroking house UOB Kay Hian warned that without banks’ support, offshore and marine companies were likely to run into cash-flow concerns, leading to more defaults.

More worryingly, the services sector, which makes up about two-thirds of Singapore’s economy, is showing signs of strain, growing by just 1.7 per cent, the slowest pace since the 2008 financial crisis.

“This is particularly worrying as the services sector contributes 68 per cent of Singapore’s GDP and accounts for nearly 72 per cent of total employment,” said UOB economists.

Financial services have been hit hard by growing levels of volatility in recent months, arising from the shock decision by Britain to leave the European Union.

And the uncertainty is likely to persist, according to Singapore’s central bank’s managing director Ravi Menon. “Uncertainty prevails over exactly when and how Brexit will take place; we can expect recurrent bouts of market volatility in the months ahead,” he said at the bank’s annual report briefing.

Even the job market, which has been tight for years, is starting to wobble, with rising job losses and unemployment rates. Unemployment for citizens rose to 3.1 per cent in June, up from 2.6 per cent in March. Layoffs crept up to 5,500 between March and June, higher than the 3,250 in the same period last year.

“We now see emerging signs of softening seeping into the job market, known to be a lag indicator of the economy,” said Varathan.

But it may be too early to say if the city state is headed for a recession.

Varathan did not rule out a full-blown recession, though much will depend on outside factors, such as the Brexit negotiations and whether China has a soft landing.

OCBC economist Selena Ling was more optimistic on Singapore’s short-term prospects. She said while growth is stagnating, domestic sectors such as construction and parts of services, including food and beverage and accommodation, remain resilient.

“Our 2016 GDP growth forecast stands at 1.8 per cent as cyclical headwinds to the external-oriented sectors remain strong but domestic oriented sectors should continue to remain supportive for growth,” she said.

With a slowdown, questions about Singapore workers’ need to jostle with foreign talent, and the availability of solid white-collar jobs that have receded are likely to resurface, eroding some of the feel-good effects of the city’s 50th anniversary celebrations. Independent Singapore turns 51 on August 9.

Aldon Goh, 38, an engineer who was made redundant from an oil and gas company, is among those growing wary. After 10 years in the sector he has sent out 50 applications without a single reply in three months.

“I thought it would be easy to find another job with a mechanical engineering degree but it’s been a slog so far,” he said.

“Maybe I’ll look at teaching, or become an Uber driver. Or maybe set up a small shop selling mobile phone covers. At least, I can make some money.”

Sue-Ann Chia is a Singapore-based journalist and runs a writing and communications consultancy.