Singapore factory output growth eases to 6.8% in July; electronics up 11.2%

[SINGAPORE] Factory output rose 6.8 per cent year on year in July, moderating from June’s revised 7.5 per cent growth, data from the Economic Development Board showed on Wednesday (Aug 26).

This was in line with expectations by private-sector economists who had similarly forecast a 6.8 per cent expansion in a Bloomberg poll.

Excluding the volatile biomedical manufacturing cluster, output increased 8 per cent year on year, slowing from June’s revised 9.9 per cent expansion. 

On a seasonally adjusted monthly basis, output increased 2.3 per cent in July, compared with June’s revised figure of a 7 per cent contraction.

Excluding biomedical manufacturing, output also increased 0.8 per cent, reversing from the revised 10.9 per cent contraction in the previous month. 

Within the manufacturing sector, all clusters recorded output growth on a year-on-year basis in July, except the biomedical manufacturing and chemicals clusters.

The linchpin electronics cluster posted the second-highest growth among all manufacturing clusters, with output rising 11.2 per cent in July, down from June’s 21.1 per cent growth.

Growth within this cluster was led by infocomms and consumer electronics (51.7 per cent) and semiconductors (8 per cent) on the back of sustained artificial intelligence-related demand.

This was followed by other electronic modules and components (2.5  per cent) and computer peripherals and data storage (0.8 per cent).

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Performance by cluster

The precision engineering cluster had the highest year-on-year rise in July at 17.7 per cent.

Within this cluster, machinery and systems expanded 18.2 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 15 per cent growth in the precision modules and components segment.

Output in the transport engineering cluster grew 10.8 per cent, driven by gains in the land (28.5 per cent) and aerospace segments (15.8 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 (-2.1 per cent), which recorded lower production of oil and gas field equipment.

General manufacturing expanded 4.9 per cent, driven by a gain in the food, beverages and tobacco segment (10.4 per cent), which produced more beverage and dairy products, and printing (2.7 per cent).

These were offset by a decline in miscellaneous industries (-5.9 per cent) due to lower production of structural metal products and furniture.

Meanwhile, the chemicals cluster contracted 10.6 per cent, the steepest decline among all clusters.

Lower production in the petrochemicals (-48.7 per cent) and petroleum (-7 per cent) segments – due to plant maintenance, softer demand and feedstock supply disruptions – offset growth in others (8 per cent) and specialties (5.5 per cent) segments.

Biomedical manufacturing declined 5.3 per cent due to contractions in both pharmaceuticals (-14.3 per cent) and medical technology (-2.2 per cent).