Singapore’s factory output extends decline on biomedical slide; down 1.6% in April

SINGAPORE’S factory output fell 1.6 per cent year on year in April, slowing from the previous month’s contraction, as output in the volatile biomedical cluster fell, data from the Singapore Economic Development Board showed on Friday (May 24).

This was worse than the forecast given by economists, who predicted a median contraction of 0.5 per cent in a Bloomberg poll.

However, April’s prints were an improvement from March’s 9.2 per cent contraction.

Excluding the volatile biomedical sector, output increased 1.7 per cent year on year in April, reversing from the 5.9 per cent slide in March.

Factory output in the key electronics sector, which accounts for almost half of total manufacturing output, fell 1.1 per cent on the year, slowing from the 11.3 per cent contraction in the previous month.

Output in the biomedical sector contracted 29.1 per cent year on year in April, extending from the 34.8 per cent decline in March.

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In particular, the pharmaceuticals segment posted a 54.6 per cent drop in production in April, though this was partially offset by a 13.6 per cent rise in the medical technology segment’s output.

All other clusters grew:

• Transport engineering (10.6 per cent)
• General manufacturing (7.3 per cent)
• Chemicals (3.1 per cent)
• Precision engineering (2.9 per cent)

Noting that transport engineering was the “best performer” in April, DBS economist Chua Han Teng said: “The aerospace segment within transport engineering should be supported by demand for maintenance and repair jobs, amid the continued recovery in global air travel.”

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Singapore factory output reverses into negative territory in March, down 9.2%

On a seasonally adjusted, monthly basis, manufacturing output grew 7.1 per cent in April, reversing from the 16.1 per cent decline in March.

Excluding biomedical manufacturing, output rose by 3.6 per cent, improving from the 8.6 per cent decline earlier.

Singapore’s manufacturing sector “remains poised for a fragile recovery in 2024, improving from 2023’s full-year contraction”, Chua said.

He added: “The electronics cluster’s performance will be key to Singapore’s factory recovery in 2024. We expect Singapore’s electronics output to benefit from positive spillovers arising from the ongoing global tech upturn.”