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SINGAPORE – Singapore’s manufacturing performance in September is fuelling hopes of a turnaround after a year-long slump as electronics, and especially semiconductor, demand recovered.
Total factory output fell 2.1 per cent in September, a marked improvement from the 12.1 per cent contraction in August, according to data released by the Economic Development Board on Thursday.
The drop, which made for 12 straight months of decline, was also smaller than the 4.5 per cent decline forecast by analysts in a Bloomberg poll.
Excluding the volatile biomedical industry, factory output edged up 0.1 per cent, after falling 2.7 per cent in August.
The key electronics industry saw output grow 10.2 per cent year on year, after shrinking 18.9 per cent in August.
Within electronics, infocomms and consumer electronics production surged 21.6 per cent, semiconductors grew 13.5 per cent, and other electronics modules and components segments rose 4.7 per cent. Computer peripherals and data storage declined 22.7 per cent.
RHB acting group chief economist Barnabas Gan said that Singapore’s manufacturing momentum is expected to strengthen in the current quarter, due to improving global trade winds and the gradual recovery in China-centric economic data.
He said: “We are positive on the electronics, transport engineering and general manufacturing industries in the next six to 12 months.
“There is a material chance for manufacturing growth on an annual basis to turn positive at year-end.”
For September, the biomedical industry was the worst performer, with production plunging 18.9 per cent year on year.
Within the cluster, the output of the pharmaceuticals segment contracted 41.4 per cent on account of a different mix of active pharmaceutical ingredients being produced, compared with a year ago. However, the medical technology segment expanded 9.3 per cent, supported by strong export demand for medical services.
Output in the transport engineering cluster grew 13.2 per cent in September, over the same month in 2022.
The marine and offshore engineering segment led the charge with an expansion of 24.7 per cent due to higher levels of activity in shipyards and increased production in oil and gas field equipment.
The aerospace segment grew 14.8 per cent as a result of higher demand for aircraft parts and more maintenance, repair and overhaul jobs from commercial airlines on the back of strong air travel demand.
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