Singapore’s factory output slips back into negative territory in December, down 2.5%
SINGAPORE’S factory output contracted 2.5 per cent year on year (yoy) in December, dragged down by a double-digit decline in the volatile biomedical sector, data from the Singapore Economic Development Board (EDB) showed on Friday (Jan 26).
The reading registered a decline from the previous month’s revised figure of zero per cent. It also underperformed against economists’ median expectations of a 1 per cent growth, according to a Bloomberg poll.
Excluding the biomedical cluster, factory output grew 0.5 per cent, though this was slower than November’s revised growth figure of 1.1 per cent.
For the whole of 2023, Singapore’s factory output declined 4.3 per cent. Excluding biomedical manufacturing, factory output shrank 3.6 per cent for the whole year.
The latest data reflects the unevenness of Singapore’s manufacturing recovery, said DBS economist Chua Han Teng. “While the worst of Singapore’s factory slump is already behind us, we expect the manufacturing recovery to be gradual and fragile in 2024.”
Bearing in mind the latest factory output data, private-sector economists are expecting Singapore’s final fourth-quarter growth to be revised downwards in February, from the advance estimate of 2.8 per cent.
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Barclays economist Brian Tan expects Q4’s growth to be slashed to 2.4 per cent yoy, while RHB acting chief economist Barnabas Gan expects a downgrade to 2.3 per cent yoy. Gan also believes full-year growth will be revised down to “closer to 1 per cent”, from the flash estimate of 1.2 per cent.
Maybank economists Chua Hak Bin and Brian Lee forecast that Q4’s growth will be revised down to around 2.5 per cent. They also expect full-year growth in 2023 to be slashed to 1.1 per cent.
In December, the key electronics cluster grew 6.3 per cent yoy, expanding more quickly than November’s 5.1 per cent rise. The semiconductor segment was up 17.7 per cent, supported by improved demand in selected end markets, such as the one for smartphones.
For the whole of 2023, the electronics cluster fell 3.2 per cent compared with 2022.
Biomedical manufacturing made the biggest decline in December, tumbling 23.9 per cent yoy, extending the previous month’s 2.8 per cent contraction. The cluster was dragged down by pharmaceuticals output, which fell 45 per cent, due to lower production of biological products and a different mix of active pharmaceutical ingredients being produced.
For the whole of 2023, biomedical manufacturing output fell 9.6 per cent.
Output also fell for the precision engineering cluster, by 7.4 per cent, though this was a narrower contraction than November’s 12 per cent decline. In 2023, precision engineering output declined 8 per cent.
Output in general manufacturing slipped 15.9 per cent, with all segments recording output declines. December’s reading was also a reversal from November’s 1.5 per cent growth. For the whole of 2023, the cluster shrank 5.8 per cent yoy.
In contrast, output in chemicals rose 2.8 per cent, extending the 2.6 per cent gain recorded in November. For the whole of 2023, the cluster declined 6.7 per cent from 2022.
Transport engineering grew 0.2 per cent in December, decelerating from the 8.6 per cent expansion recorded in November. Growth was dampened by the marine and offshore engineering segment, which fell 1.7 per cent, reversing November’s 31.7 per cent rise.
For the whole of 2023, transport engineering output grew 15 per cent yoy.
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