Electronics propel Singapore factories to 10th straight month of growth in August

SINGAPORE factory output grew for the 10th straight month in August, beating expectations to clock a 11.2 per cent year-on-year expansion.

While industrial production slowed down from 16.4 per cent growth in July, the latest increase was still ahead of the median forecast of 8.2 per cent in a Bloomberg poll.

Sustained strength in electronics more than made up for a dip in biomedical manufacturing, according to Economic Development Board (EDB) data on Friday. Output was up by a larger 13.6 per cent when biomedical contributions were excluded.

Indeed, the factory sector was dragged down by the volatile biomedical cluster, which declined by 0.6 per cent in August to reverse the previous month’s 78.6 per cent gains.

While the medical technology segment was lifted by higher export demand for medical devices, industrial output in the pharmaceuticals segment shrank on a different mix of active pharmaceutical ingredients, the EDB said.

Still, all other industries were in the black in August, including the linchpin electronics cluster, where growth accelerated to 15.4 per cent, up from 3.2 per cent in July. The semiconductor segment recovered its strength to grow by 16.8 per cent, up from 1.4 per cent in July, which the EDB noted was “supported by demand from 5G markets”.

Similarly, production in precision engineering expanded by 22.9 per cent in August – rising from 20.5 per cent in July – as the machinery and systems segment raised its output of semiconductor and industrial process equipment.

Meanwhile, the chemicals cluster returned to positive territory, as output inched up by 0.4 per cent in August, compared with the 5.6 per cent decline in July. That’s as the petroleum segment notched double-digit growth against a year-ago low base, which offset contractions in specialties, petrochemicals and other chemicals.

Transport engineering – which had been dragged down by a weak global oil and gas market and international travel restrictions in the year before – continued its recovery with a 23.5 per cent increase in output in August, against 32.2 per cent in July. Both marine and offshore engineering and aerospace engineering rose on the low base.

Rounding off the sector’s broad-based improvement, general manufacturing was up by 6.2 per cent in August, against a 10.8 per cent rise in the previous month. The miscellaneous industries segment was buoyed by returning demand for construction-related materials, even as food, beverage and tobacco and printing output shrank.

On a seasonally adjusted, monthly basis, industrial production increased by 5.7 per cent in August, or 8.8 per cent with biomedical manufacturing contributions excluded.