Singapore March industrial output surprises with small 0.5% y-o-y contraction

SINGAPORE'S manufacturing output fell by a less-than-expected 0.5 per cent in March on a year-on-year basis. Excluding the biomedical sector's output, the fall was sharper at 5.5 per cent.

Total output rose by 1 per cent when compared to February this year, on a seasonally adjusted month-on-month basis. Excluding biomedical manufacturing, output fell 1 per cent.

These figures, released by the Economic Development Board (EDB) on Tuesday, beat economists' estimates. An earlier survey of 19 economists by Bloomberg put the year-on-year fall at 2 per cent.

The government had earlier showed in its gross domestic product (GDP) estimates that the manufacturing sector recorded a sixth straight y-o-y contraction with a decline of 2 per cent in the first three months of 2016, but posted a strong 18.2 per cent quarter-on-quarter growth. The uptick "largely reflected a temporary ramp-up in pharmaceutical production in January", said the Monetary Authority of Singapore (MAS) then.

On Tuesday, EDB said that the biomedical sector continued to grow by 23.1 per cent when compared to March last year, while it grew 19.4 per cent year-to-date. Pharmaceuticals grew 27.9 per cent, on the back of a different mix of active pharmaceutical ingredients produced.

Electronics also saw growth, increasing its output by 5.8 per cent from a year ago, or 3 per cent year-to-date. In particular, the semiconductor segment ramped up production by 21.7 per cent, but EDB noted that "declines in the rest of the electronic segments" dragged down the sector's performance.

Food, beverages and tobacco manufacturing helped lift the general manufacturing industries cluster's output by 0.9 per cent. On a year-to-date basis, output of the general manufacturing industries cluster fell 1.5 per cent.

The chemicals cluster posted a contraction of 4.9 per cent, dragged down by the specialties, petroleum and petrochemicals segments' fall in output. The cluster fell by 2.7 per cent year-to-date.

Precision engineering saw a steeper 7.7 per cent fall, with its year-to-date contraction at 8.4 per cent.

Transport engineering recorded the deepest contraction at 23.1 per cent, as the land and marine and offshore segments dragged on performance. Output of the transport engineering cluster decreased 20.5 per cent in the first three months of this year.