Singapore’s factory output growth accelerates to 15.4% in August, but undershoots estimates

[SINGAPORE] The Republic’s factory output surged 15.4 per cent year on year in August, picking up from July’s revised 6.9 per cent growth – but falling below consensus estimates for a median 18.3 per cent expansion in a Bloomberg poll.

Excluding the volatile biomedical manufacturing cluster, output grew 17 per cent year on year, extending the 8.2 per cent increase recorded in July, data from the Economic Development Board (EDB) showed on Monday (Sep 28).

On a seasonally adjusted monthly basis, factory output slipped 0.5 per cent in August, marking a reversal from July’s 2.3 per cent gain. Excluding biomedical manufacturing, output grew 5.8 per cent, compared with an 0.8 per cent rise in the previous month.

The majority of clusters had year-on-year rises in production, with chemicals being the sole exception.

Precision engineering marked the largest jump, up 33.9 per cent year on year, compared with the preceding month’s 18 per cent expansion.

This was led mainly by higher production of semiconductor equipment in the machinery and systems segment, EDB said. It added that the precision modules and components segment saw higher output of dies, moulds, tools, jigs and fixtures as well as precision components for the electronics industry.

As for the linchpin electronics cluster, production expanded 28.5 per cent from the corresponding year-ago period, extending July’s 11.1 per cent growth.

EDB noted that this was supported by the strong production of servers and related products, semiconductors and data storage products amid robust artificial intelligence-related demand. Within the cluster, the other electronic modules and components segment reported a fall (minus 6 per cent).

Transport engineering grew 9.5 per cent, down slightly from July’s 11 per cent, led by the land and aerospace segments. The latter recorded higher production of aircraft parts and sustained maintenance, repair and overhaul jobs from commercial airlines.

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General manufacturing industries grew 1.5 per cent in August, slower than the previous month’s 5.5 per cent, supported by higher production of beverage products, commercial printing and metal doors and windows.

The volatile biomedical manufacturing cluster’s output edged up 0.4 per cent, led by a higher output of medical devices in the medical technology segment amid stronger export demand.

This was partially offset by a decline in the pharmaceuticals segment due to a different mix of active pharmaceutical ingredients being produced.

In contrast, chemicals manufacturing continued to fall, down 12.7 per cent, weighed down by the petroleum and petrochemicals segments. This extended July’s 10.5 per cent decline.

EDB said that petroleum output was affected by plant maintenance, while petrochemicals production continued to be constrained by softer demand and feedstock supply disruptions. However, the specialties segment recorded output growth, on account of higher production of industrial gases and food additives.