Electronics lifts Singapore factory output 7.2% in June, but growth misses forecasts

[SINGAPORE] Factory output rose 7.2 per cent year on year in June, missing expectations and moderating from May’s revised 17.8 per cent growth, data from the Economic Development Board showed on Monday (Jul 27).

In a Bloomberg poll, the median estimate by private-sector economists was a 9.1 per cent expansion. 

Excluding the volatile biomedical manufacturing cluster, output increased 9.6 per cent year on year, slowing from May’s revised growth of 23.2 per cent. 

On a seasonally adjusted monthly basis, output decreased 7.2 per cent in June, compared with May’s revised figure of 6.9 per cent growth. Excluding biomedical manufacturing, output also decreased 11.2 per cent, in contrast to the revised 11.7 per cent growth in the previous month. 

Within the manufacturing sector, the electronics, precision engineering and transport engineering clusters recorded output growth while the rest of the clusters declined.

The linchpin electronics cluster posted the strongest growth among all manufacturing clusters with output rising 21.3 per cent in June, easing from May’s 49.2 per cent surge.  

Growth within this cluster was led by infocomms and consumer electronics at 32.1 per cent, on the back of sustained artificial intelligence-related demand.

This was followed by semiconductors (21.1 per cent), computer peripherals and data storage (8.2 per cent), and other electronic modules and components (5.2 per cent).

Performance by cluster

The precision engineering cluster had the second highest year-on-year rise in June at 14.9 per cent.

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Within this cluster, machinery and systems expanded 16.6 per cent due to higher production of semiconductor equipment.

Meanwhile, the higher output of optical instruments, electronic connectors and dies, moulds, tools, jigs and fixtures contributed to the 6.6 per cent growth in the precision modules and components segment.

Output in the transport engineering cluster grew a modest 4.6 per cent, driven by gains in the land (41.2 per cent) and aerospace segments (11.2 per cent). The latter was bolstered by higher production of aircraft parts and sustained maintenance, repair and overhaul jobs from commercial airlines.

The cluster’s overall growth was partially offset by a decline in the marine and offshore engineering segment (-14.1 per cent), which recorded a lower level of activity and softer demand for oil and gas field equipment.

General manufacturing contracted 6.8 per cent despite gains in printing (2.9 per cent) and miscellaneous industries (16.3 per cent). It was offset by a decline in food, beverages and tobacco (-16.9 per cent) due to lower production of milk powder as well as beverage and cocoa products.

Biomedical manufacturing declined 11.4 per cent due to contractions in both pharmaceuticals (-34.4 per cent) and medical technology (-0.7 per cent).

The chemicals cluster contracted 11.7 per cent, the steepest decline among all clusters.

Lower production in the petroleum (-10.2 per cent) and petrochemicals (-52.7 per cent) segments, due to disruptions in feedstock supply, offset growth in the others segment (22 per cent). The specialties segment was unchanged.