Singapore factory output grows 0.1% in August, undershooting expectations

SINGAPORE'S factory output grew by most accounts in August 2016, though still falling short of expectations.

Factory output grew 0.1 per cent year on year last month, lifted by a stronger showing from the precision engineering and electronics clusters, the Economic Development Board said in release on Monday. Taking away the volatile biomedical sector, overall growth was at a stronger 2.3 per cent.

On a seasonally adjusted month-on-month basis, manufacturing output was unchanged in August compared to July, when it fell by a surprising 3.9 per cent. Excluding biomedical manufacturing, August's month-on-month output grew 1.5 per cent.

Though August's numbers portrayed a more stabilised sector after several months of mixed signals, the performance was still poorer than expected.

The median forecast from a Reuters poll of 12 economists had put the headline growth at 0.6 per cent year on year. On a month-on-month basis, they saw a 1.8 per cent rise.

Output of the precision engineering cluster increased 11.6 per cent on a year-on-year basis in August. On a year-to-date basis, output of the precision engineering cluster declined 1.6 per cent compared to the same period a year ago.

The electronics cluster reported a 10.8 per cent increase in output for August year on year. In the first eight months of 2016, output grew 8.7 per cent compared to the same period last year. This cluster produces the most in manufacturing, accounting for about 27.4 per cent of all factory output.

Noticeably, the chemicals cluster also reported growth at 1.8 per cent. This was supported by higher output in the chemicals (15.4 per cent), petroleum (12.3 per cent) and specialties (11.3 per cent) segments.

The transport engineering cluster's output shrank the most at 16.8 per cent, with the marine and offshore engineering segment declining the most at 31.4 per cent. On a year-to-date basis, output fell 18 per cent compared to the same period a year ago.

Biomedical cluster saw a dip of 8.4 per cent, as a 14.1 per cent drop in pharmaceuticals dragged down performance. In the first eight months of 2016, the cluster increased output by 6.8 per cent when compared to the same period last year.

General manufacturing output fell 1.6 per cent. Cumulatively, the cluster's output fell 1.9 per cent year-to-date.