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Singapore industrial output falls 8.7% y-o-y in April, largest fall in over 2 years

A HUGE drop in pharmaceutical output last month sent Singapore's manufacturing output plunging 8.7 per cent year-on-year in April. This decline, industrial production's steepest since February 2013, was far larger than the 3 per cent decline economists had been expecting, going by the median forecast of 10 forecasters polled by Reuters before the data release.

This third consecutive month of contraction for the manufacturing sector was also due to continued falls in transport engineering, general manufacturing and precision engineering output. But the key electronics sector returned to growth.

Pharmaceuticals output fell 38 per cent from last April's high base, due to the lower production of active pharmaceutical ingredients and biological products, the Economic Development Board (EDB) said. This outweighed the medical technology segment's robust 28.1 per cent growth to drag overall biomedical output 28.6 per cent lower in April.

Excluding the biomedical cluster, industrial output would have fallen a smaller 1.9 per cent.

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Biomedical's dismal showing also affected manufacturing's month-on-month performance. After seasonal adjustments, overall output fell 5.8 per cent month-on-month in April, contrary to the 0.5 per cent month-on-month rise economists had been expecting. But even after biomedical output was stripped out, output still fell 2.2 per cent month-on-month.

Electronics was one bright spot, growing 1.2 per cent year-on-year in April. EDB attributed this to higher export demand in electronics modules and components, data storage and computer peripherals. Double digit growth in these segments offset a 7.2 per cent year-on-year drop in electronics' main semiconductor segment.