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Quick takes: What 5.5% drop in Singapore's March manufacturing output means for growth outlook

SINGAPORE's industrial output shrank 5.5 per cent in March from a year ago, a sharper decline than February's 3.3 per cent drop, but better than the 5.9 per cent drop that economists had been expecting. This follows a better than expected report on non-oil domestic exports (NODX) for the month of March too.

Here's what some of them say about what this means for the economy's growth outlook:

Citi economists Kit Wei Zheng and Yap Kim Leng:

"Q1 GDP growth could be revised up to 2.2 per cent year-on-year, 2 per cent quarter-on-quarter SAAR (seasonally adjusted annualised rate) versus advance estimate of 2.1 per cent year-on-year, 1.1 per cent quarter-on-quarter SAAR. This is largely due to biomedicals output.

"The stronger than expected March NODX and industrial production data may explain the Monetary Authority of Singapore's optimism on growth, but whether this is sustained remains to be seen, given the volatility of industrial production and limited likelihood of recovery in marine and offshore engineering, even if oil prices recover modestly."

Bank of America Merrill Lynch economist Chua Hak Bin:

"Growth continues to be services-led, driven by financial services, business services and wholesale trade. Manufacturing continues to be dampened by restructuring and stricter foreign worker policies. External demand may recover in Q2 after a weak Q1, and provide some modest improvements to exports and manufacturing."

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