Singapore factory output plunges by 8% in August, damning hopes of recovery

• Sep 26, 2019

SINGAPORE factory output plunged by 8 per cent year on year in August, extending the Republic’s manufacturing decline into its fourth month.

Industrial production was dragged down by the struggling electronics sector, according to statistics released by the Economic Development Board on Thursday. Excluding output from the volatile biomedical manufacturing sector, manufacturing fell by 12.4 per cent.

The drop was much sharper than the 0.1 per cent dip posted in July, and also far steeper than the forecast of 0.6 per cent from private economists polled by Bloomberg.

It could worsen analysts’ fears that a manufacturing downturn may push the Republic into technical recession, or two straight quarters of quarter-on-quarter contraction.

After Singapore’s bracing second-quarter slowdown to 0.1 per cent gross domestic product growth, Barclays analysts recently suggested that third-quarter growth could still rebound, and added that policymakers may be counting on economic stabilisation in 2020.

“There are early signs that the economy should be able to avoid a technical recession in Q3 2019, particularly the sequential rebound in July’s industrial production,” they said in a report on Wednesday.

But, even with a growth recovery, the central bank could “remain sceptical over its sustainability… especially as domestic economic activity remains broadly depressed”.

Source: https://www.businesstimes.com.sg/government-economy/singapore-factory-output-plunges-by-8-in-august-damning-hopes-of-recovery