Singapore factory output in February rebounds sharply by 17.6%, highest level in 8 months

SINGAPORE'S factory output rebounded sharply in February to its highest level in 8 months after a brief slowdown in January threatened to throw the growth trajectory off course.

Industrial output jumped 17.6 per cent year on year in February from the previous month's 2.4 per cent on the back of a surge in electronics and biomedical production, according to data from the Singapore Economic Development Board (EDB) on Friday (Mar 25).

February's showing was nearly 3 times better than the 6.3 per cent private-sector economists had projected, according to a Bloomberg poll.

Excluding the typically volatile biomedical cluster, output grew 16.8 per cent year on year.

Sequentially, overall manufacturing output rose 16.6 per cent in February, while the figure is 12.3 per cent excluding biomedical production.

Electronics output leapt 32.4 per cent year on year in February as all segments grew, vastly improving from the 1 per cent growth in the previous month.

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In particular, the semiconductors segment expanded 39.4 per cent, supported by strong demand from 5G markets and data centres amid the global chip shortage, EDB noted.

Biomedical production rose 25.3 per cent year on year, reversing the 8.8 per cent contraction in January.

Pharmaceuticals output surged 46.7 per cent with a higher production of biological products and a different mix of active pharmaceutical ingredients, while the medical technology segment expanded 5.8 per cent with higher export demand for medical devices, EDB said.

Most other sectors, however, saw production levels ease in February.

• General manufacturing (12.6 per cent)
• Transport engineering (4.5 per cent)
• Precision engineering (1 per cent)

Chemicals production was the only cluster that saw output fall at 2.7 per cent year on year.

UOB economist Barnabas Gan noted that February's output grew despite the high base from a year ago, amid strong momentum in the biomedical, electronics and precision engineering sectors.

"The strong showing in Singapore's manufacturing in February 2022, despite the high-base data at the same time last year, suggests that Singapore's manufacturing sector continues to stay supported by the global trade recovery, especially on the back of healthy semiconductor and biomedical-related demand," said Gan.

Supply chain disruptions from China's flash lockdowns and slowing external demand amid the Russia-Ukraine war would likely have a more "visible" impact on manufacturing and exports in March and beyond, said Maybank economists Chua Hak Bin and Lee Ju Ye.