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Singapore factory output falls by 8.4% in July
SINGAPORE factory output fell again in July, with a worse-than-expected performance dragged down in part by the return of electronics production to negative territory.
Industrial production lost 8.4 per cent compared with the same period the year before, with the pace of decline increasing from the 6.5 per cent fall in June. The latest drop also came short of private-sector analysts’ median estimate of a 7 per cent drop in a Bloomberg poll.
Meanwhile, excluding the volatile biomedical cluster, manufacturing was down by 5.2 per cent on the year before, according to Economic Development Board figures on Wednesday.
“The sharper decline mainly reflected an unfavourable base effect,” Barclays Bank economist Brian Tan said in a note, even as he observed that “pharmaceuticals production no longer appears to be benefiting from the Covid-19 outbreak”.
Biomedical manufacturing was down by 24.8 per cent in July, compared with the 30.1 per cent fall in June, on lower output of both medical technology and pharmaceuticals.
To be sure, making more semiconductor equipment lifted precision engineering’s machinery and systems segment and offset lower output of optical products and dies, moulds, tools, jigs and fixtures. This drove the cluster to grow 9.3 per cent in July, against 10.2 per cent in the month before.
But other manufacturing clusters stood in the red – including electronics manufacturing, which had earlier been a bright spot for the factory sector.
Electronics lost 1.4 per cent year on year in July – reversing the previous month’s 17.8 per cent expansion – as growth slowed in the semiconductor segment while the infocomm and consumer electronics segment as well as the computers and data storage segments continued to post declines.
The novel coronavirus pandemic was partly to blame, as the transport engineering cluster’s output shrank by 39.8 per cent in July on a broad-based slump, extending the previous month’s 37.4 per cent drop.
With the world’s passenger airline fleets largely grounded, aircraft repair and maintenance work volumes stayed low, while foreign worker movement controls, taken to curb the spread of the virus, also affected the marine and offshore engineering segment as shipyard activity cooled sharply.
Meanwhile, chemicals output was down by 2.4 per cent, against a decline of 11.7 per cent in June, despite a rebound in petrochemical production growth.
That’s as the petroleum and specialty and other chemicals segments all contracted, amid plant maintenance shutdowns and lower export orders from the global Covid-19 outbreak.
General manufacturing also saw production falling across the board. The cluster’s output was down by 22.2 per cent in July – widening from the 13.1 per cent drop in June – on lower production of items such as milk powder and beverage products, and construction-related goods.
On a seasonally adjusted, monthly basis, Singapore’s industrial production rose by 1.6 per cent in July, or by 10 per cent when biomedical manufacturing output was excluded.
Source: https://www.businesstimes.com.sg/government-economy/singapore-factory-output-falls-by-84-in-july