Singapore manufacturing sees surprise 0.2% contraction in September

• Oct 26, 2018

SINGAPORE’S manufacturing output took a surprise fall in September, shrinking 0.2 per cent year on year in the first contraction since December 2017, based on preliminary estimates from the Economic Development Board on Friday. But excluding the volatile biomedical manufacturing sector, output grew 1.9 per cent.

Coming after three straight months of slowing growth, September’s decrease confounded economists’ expectations of 3.5 per cent growth for the month, after August’s revised growth figure of 3.7 per cent. Economists had predicted that industrial production would slow further in the third quarter of 2018, but few had expected contraction.

On a seasonally adjusted month-on-month basis, manufacturing output saw the third month of decline in September, falling 4.9 per cent and marking an acceleration from August’s 2.2 per cent fall. Excluding biomedical manufacturing, however, the fall was 2.4 per cent, an improvement from August’s 3 per cent slide.

Electronics, previously a major driver of manufacturing growth, saw output fall 5.5 per cent year on year in September, with all segments recording lower production apart from infocomms and consumer electronics. But cumulatively, the electronic cluster’s output for the first nine months of the year was still up 10.8 per cent from the same period in 2017.

The best performer was transport engineering, with output rising 39.4 per cent year on year. Contributing to this was a 71.4 per cent expansion in marine and offshore engineering and a 23.6 per cent growth in the aerospace segment. The land transport segment, however, declined 17.6 per cent.

Precision engineering output was up 4.1 per cent, led by a 13.8 per cent expansion in precision modules and components. The machinery and systems segment fell 2.1 per cent.

Apart from electronics, other clusters which saw a drop in production included general manufacturing, down 2.7 per cent.

Chemicals output fell 7.1 per cent. Although the specialities segment grew 7.8 per cent with higher production of industrial gases and mineral oil additives, the other chemical segments declined. Petrochemicals and petroleum contracted 14.3 per cent and 15.7 per cent respectively due to maintenance shutdowns. The other chemicals segment fell 16.7 per cent with lower output in fragrances.

Biomedical manufacturing was the cluster which fared worst, with output down 9.1 per cent, comprising a 5.8 per cent fall in medical technology and an 11.1 per cent fall in pharmaceuticals. For the first nine months of the year, output was still up 5.2 per cent cumulatively from the same period a year before.

Source: https://www.businesstimes.com.sg/government-economy/singapore-manufacturing-sees-surprise-02-contraction-in-september