Singapore factory output growth slows sharply to 3.4% in September, missing forecasts

[SINGAPORE] The Republic’s factory output growth slowed sharply to 3.4 per cent year on year in September, from 15.4 per cent in August, as electronics production moderated and biomedical manufacturing contracted.

The reading fell short of the 7.8 per cent expansion forecast by private-sector economists in a Bloomberg poll, based on data released by the Economic Development Board (EDB) on Monday (Oct 26).

Excluding the volatile biomedical manufacturing cluster, output increased 9 per cent year on year, down from August’s revised 16.8 per cent expansion.

On a seasonally adjusted monthly basis, output decreased 3.9 per cent in September, compared with August’s revised figure of 1 per cent contraction.

Excluding biomedical manufacturing, output declined 5.5 per cent, reversing from the revised 5.3 per cent expansion in the previous month.

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

The linchpin electronics cluster posted the third-highest growth among all manufacturing clusters with output rising 5.7 per cent, easing from August’s 28.3 per cent growth. 

All segments expanded amid robust artificial intelligence-related demand, except other electronic modules and components (-4.2 per cent). 

Growth was led by infocomms and consumer electronics (29 per cent), and computer peripherals and data storage (21.3 per cent), while semiconductors recorded a gain of 1.9 per cent. 

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Performance by cluster

The precision engineering cluster had the highest year-on-year rise in September at 31 per cent.

Within this cluster, machinery and systems expanded 34.8 per cent due to higher production of semiconductor equipment.  

Meanwhile, the higher output of industrial rubber goods, precision metal products and dies, moulds, tools, jigs and fixtures contributed to the 12.4 per cent growth in the precision modules and components segment.

Coming in second was the transport engineering cluster, which recorded output growth of 10.6 per cent, driven by gains in the land (31.4 per cent) and aerospace segments (16.3 per cent).

Aerospace 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 (-6.3 per cent), which recorded lower shipyard activity and lower production of oil and gas field equipment.

General manufacturing expanded 4 per cent, driven by gain in food, beverages and tobacco (11 per cent), which produced more beverage and dairy products as well as animal feeds, and printing (7.6 per cent).

However, it was offset by a decline in miscellaneous industries (-8.4 per cent) due to lower production of structural metal products and furniture. 

Meanwhile, the chemicals cluster contracted 4.6 per cent as it was weighed down by the other chemicals segment (-19.4 per cent) and petrochemicals (-24.3 per cent). 

The other chemicals segment recorded lower output of fragrances while petrochemicals production remained constrained by softer demand and feedstock supply disruptions. 

In contrast, the specialties and petroleum segments recorded output growth of 14.3 per cent and 4.6 per cent, respectively. The specialties segment produced more industrial gases, chemicals and mineral oil additives.

Biomedical manufacturing declined 32.8 per cent, led by a 65.9 per cent contraction in pharmaceuticals, which saw a different mix of active pharmaceutical ingredients being produced. The medical technology segment slipped 1.7 per cent due to softer export demand.