industrial production index (IPI)

Things have been looking up for Singapore’s factory output

Singapore’s factory output snapped out of a three-month decline to grow 13.7% in August thanks to semiconductors and biomedicals

Singapore’s factory output remained in the red with an 8.4% year-on-year contraction in July, following broad based contraction in all sectors. This marks the metric’s third straight month of decline.

Singapore’s factory output remained in the red with a 6.7% year-on-year contraction in June, following volatility in the biomedical cluster. This marks the metric’s second straight month of decline.

Economists expect Singapore’s manufacturing to weaken in the coming months, following the plunge in May’s factory output numbers.

A further drop in the cluster’s output was mitigated by a 2.8% growth in the machinery and systems segment. This was enabled by stronger production of semiconductor equipment.With a 1.0% fall, the electronics cluster was the last to register a contr

The good performance of the pharmaceutical sector suggests “Singapore is well-positioned to produce and export medical necessities,” says United Overseas Bank (UOB) economist Barnabas Gan.

“[A] more pronounced impact [on factory output] is likely to be seen from April 2020 onwards due in part to the implementation of the ‘circuit breaker’ measures,” says EDB.

"Even without the US-China trade war, the Covid-19 pandemic is the black swan event that has... impacted global demand and dashed hopes of a manufacturing rebound,” says Selena Ling, who heads OCBC’s treasury research and strategy department.

The 3.4% increase in factory output 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 Covid-19