Singapore factory output for fourth straight month; falls 2.7% in Jan, surprising estimates

SINGAPORE’S industrial production fell for the fourth consecutive month in January, dropping by 2.7 per cent on the year and deepening from December 2022’s revised 2.6 per cent fall. This came as the key electronics sector reversed from the previous month’s rebound, Economic Development Board (EDB) data showed on Friday (Feb 24).

January’s performance was worse than expected by private-sector economists, who estimated a 0.8 per cent expansion in a Bloomberg poll.

Excluding the volatile biomedical manufacturing cluster, factory output sank even further, down 6.3 per cent year on year, reversing from the 0.3 per cent growth in December.

January’s prints come after Singapore’s manufacturing Purchasing Manager’s Index (PMI) remained in contraction in January, even as overall factory activity edged up. The electronics sector PMI also marked the sixth consecutive month of contraction, though it increased modestly.

Manufacturing in the linchpin electronics sector fell 2.9 per cent from the year-ago period, reversing from December’s 4.2 per cent year-on-year growth. Most segments declined for the month as demand softened, except computer peripherals and data storage, which expanded by 2.5 per cent.

Other clusters that recorded falls were:

  • Chemicals (-13 per cent)
  • Precision engineering (-11.1 per cent)
  • General manufacturing (-18.3 per cent)

In general manufacturing, the year-on-year decline was partly due to the earlier Chinese New Year holiday, EDB said. The fall for the cluster was significantly sharper in January compared to December’s 1 per cent drop.

The fall in precision engineering production was also deeper, against the previous month’s 3.7 per cent contraction.

Production in the remaining cluster grew year on year:

  • Biomedical manufacturing (23.2 per cent)
  • Transport engineering (4.7 per cent)

Biomedical manufacturing, a volatile cluster, had recorded a 17.4 per cent contraction in December.

On a seasonally adjusted, monthly basis, manufacturing output dropped 1.1 per cent in January, reversing from December’s revised 2.9 per cent expansion. Excluding biomedical manufacturing, production edged up 0.4 per cent on the month, seasonally adjusted, less than the 4.8 per cent recorded in the previous month.