SINGAPORE'S factory output declined 0.4 per cent in July from a year ago, beating economist forecasts of a drop of 5.8 per cent despite remaining in negative territory for the third consecutive month.

July's figures also fared better compared to a revised 8.1 per cent decline in June, according to estimates from the Singapore Economic Development Board on Monday. Excluding the volatile biomedical manufacturing sector, output fell 0.7 per cent year on year.

On a seasonally adjusted month-on-month basis, manufacturing output actually increased 3.6 per cent in July. With biomedical manufacturing stripped out, output surged 9.4 per cent.

In a surprise twist, general manufacturing showed the strongest performance among the various clusters, growing by 6.9 per cent in July year-on-year compared to a dip of 0.8 per cent in June. It was pulled up by the miscellaneous industries segment, which expanded by 10.8 per cent on account of higher production of metal tanks & containers and wearing apparel, while the food, beverages & tobacco segment grew 7 per cent with higher output of beverage products.

The electronics cluster - once the key driver of Singapore's manufacturing growth - continued to contract, but its 0.9 per cent drop in July was far smaller than the 18.2 per cent plunge in June. Most of the electronic segments recorded a decline in output, but the data storage and semiconductors segments grew 1.8 per cent and 0.3 per cent respectively.

Precision engineering, which is closely linked to the electronics cluster, fared the worst with a fall of 7.5 per cent in July compared to a year ago. The machinery & systems segment recorded lower output in semiconductor foundry equipment and refrigeration systems, even as the precision modules & components segment grew 6.7 per cent on the back of higher output in optical products.

Chemicals output increased 2.2 per cent year-on-year in July, pushed up by the other chemicals and specialty chemicals segments which grew 13.1 per cent and 4.2 per cent respectively, with the former recording higher output in fragrances. On the other hand, the petrochemicals and petroleum segments contracted, mainly due to maintenance shutdowns in some plants.

The volatile biomedical manufacturing cluster ticked up by 0.8 per cent in July, as the medical technology segment expanded 17.7 per cent on the back of higher export demand for medical devices while the pharmaceutical segment declined 4.8 per cent.

Transport engineering output dipped by 0.2 per cent in July, dragged down by the land and marine & offshore engineering segments which shrank 0.7 per cent and 10.8 per cent respectively, with the latter registering lower levels of offshore, shipbuilding and repairing activities. The aerospace segment, however, grew 10.8 per cent with more repair and maintenance jobs from commercial airlines.