Singapore factory output down 0.4% in July, far better than expected

• Aug 26, 2019

SINGAPORE – Singapore’s manufacturing output in July contracted for the third consecutive month, but beat analysts’ forecasts by a mile with a decline of just 0.4 per cent over July last year.

Analysts polled by Bloomberg had expected a 5.8 per cent slump.

The sector’s performance last month also improved markedly from the 8.1 per cent plunge in June, which had been the sector’s worst showing in 3½ years.

Excluding the volatile biomedical sector, the fall in output last month was slightly steeper at 0.7 per cent, according to preliminary figures released by the Economic Development Board (EDB) on Monday (Aug 26).

On a seasonally adjusted month-on-month basis, overall manufacturing production increased 3.6 per cent. Excluding biomedical manufacturing, it grew 9.4 per cent.

There was an improvement in the the key electronics sector – which makes up over a quarter of factory production here. It contracted by 0.9 per cent last month compared with a year ago, far better than the 18.2 per cent fall in the previous month.

The data storage and semiconductors segments grew, while other segments such as computer peripherals and infocomms and consumer electronics shrank.

General manufacturing was the best-performing cluster, with output growing by 6.9 per cent compared to a 0.8 per cent drop in June. This included a 10.8 per cent jump in production by the miscellaneous industries segment on account of higher output of metal tanks and containers and wearing apparel, while the food, beverages and tobacco segment expanded 7 per cent with higher output of beverage products.

Output from the biomedical and chemicals segments also grew, by 0.8 per cent and 2.2 per cent respectively.

But precision engineering weighed down the overall sector’s performance. Output fell 7.5 per cent compared with July last year, with the machinery and systems segment shrinking while the precision modules and components segment grew on the back of higher output in optical products.

Transport engineering production also shrank by 0.2 per cent, as declines in land and marine and offshore engineering outweighed the growth in aerospace.