SINGAPORE (Feb 26): Singapore’s factory output has outperformed expectations to rise 3.4% year-on-year following a surge in biomedical manufacturing. The increase comes despite a continued decline in electronic production.
Excluding the biomedical sector, output would have plunged 3.8% in January, according to data released on Feb 26 by the Singapore Economic Development Board (EDB), a government agency under the Ministry of Trade and Industry (MTI).
The agency also notes shifting the base year of the index from 2015 to 2019, “to reflect the latest structure of Singapore’s manufacturing sector”.
Even so, the latest increase exceeds the 5.8% drop predicted by private-sector economists in a Bloomberg poll, amid expectations of lower output from the earlier than usual Chinese New Year vacation, as well as uncertainty from the novel coronavirus (Covid-19) outbreak.
On a seasonally adjusted month-on-month basis, manufacturing output increased 18.2% in January – surpassing the 4.1% logged in December 2019. Excluding biomedical manufacturing, January’s output was up 11.8%
Growth of the biomedical sector was driven by the pharmaceutical segment, which saw a 59.4% increase from a different mix of pharmaceutical ingredients and higher production of biological products. Overall, the segment saw a 41.1% expansion in output.
Precision engineering also saw growth with an 18.1% increase in output, after a largely lacklustre performance in 2019. This comes from a 25.3% growth in its machinery and systems segment following higher production of semiconductor and process control equipment.
Meanwhile, the electronics cluster widened its decline to 7.2%, despite a 17.7% increase in infocomms and consumer electronics – the only segment to log growth.
The chemicals cluster also remained contractionary with a 5.5% decline, as higher production of industrial gases and additives in the specialities segment could not stave off the sustained sluggishness in petroleum and petrochemicals.
Transport engineering output was also down 14.1% in December. This comes from the 10.5% drop in marine and offshore engineering, and 6% dip repair maintenance activity from commercial airlines.
General manufacturing followed suit with output dropping by 10.6%, partly due to the Chinese New Year break that fell in late January, EDB notes. The segment was also dragged by 8.8% from lower output from batteries and wooden furniture and fixtures.
Aside from this, it sustained a 11.8% drop from food, beverages and tobacco following lower production of milk powder products.
While the index was barely affected by Covid-19, market watchers are looking at it deteriorating further in February in reflection of the impact the virus has had on consumers and businesses.
