Singapore’s October factory output records highest jump in 15 years, up 29.1% on pharma surge

[SINGAPORE] Singapore’s factory output jumped 29.1 per cent year on year in October on the back of a surge in pharmaceutical manufacturing, data from the Economic Development Board (EDB) on Wednesday (Nov 26) showed.

This is the largest increase since November 2010, when Singapore’s economy rebounded after the global financial crisis. It also accelerated from the previous month’s rally, and far exceeded the expectations of private-sector economists, who had pencilled in a 6.7 per cent year-on-year increase, based on a Bloomberg poll.

Excluding typically volatile biomedical manufacturing, industrial production in October expanded 15.8 per cent year on year.

On a seasonally adjusted monthly basis, overall output grew 11.5 per cent in October; excluding biomedical manufacturing, output rose 11.7 per cent.

DBS senior economist Chua Han Teng said: “The manufacturing sector has started the final quarter of 2025 on a solid footing, demonstrating continued resilience from the first three quarters of the year, despite ongoing trade uncertainties stemming from the US tariff roller coaster.”

UOB associate economist Jester Koh said he sees further upside risks to his full-year gross domestic product outlook of 4.4 per cent.

Last month, several economists upgraded their GDP forecast after September’s output recorded a surprise 16.2 per cent year-on-year jump, making a stunning swing from contraction in the preceding month.

Koh said his current assumptions are “somewhat conservative and factors in a sharp sequential pullback” in November’s industrial output.

“However, if this does not materialise and the pullback is more modest, 2025 full-year GDP growth could potentially reach 5 per cent,” he said.

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Cluster performance

Factory output grew across the board, except for general manufacturing.

Biomedical manufacturing in October leapt 89.6 per cent year on year, fuelled by a 122.9 per cent surge in the pharmaceuticals segment.

This was on account of higher production of active pharmaceutical ingredients and biological products, EDB said. Meanwhile, the medical technology segment grew 7.3 per cent.

UOB’s Koh said pharma production was likely still “running at an accelerated pace to fulfil front-loaded orders”, since the implementation of US pharma tariffs had been delayed from the original deadline of Oct 1.

Transport engineering was the next best performing cluster, as output increased 29.5 per cent year on year.

This was largely driven by the aerospace segment, which was bolstered by higher production of aircraft parts and more higher-value maintenance, repair and overhaul jobs from commercial airlines.

The linchpin electronics cluster posted a 26.9 per cent year-on-year expansion in output, supported by a 155.6 per cent surge in the infocomms and consumer electronics segment.

Chua said the electronics cluster could “hold up for some time in the near term” due to artificial intelligence (AI)-related demand and US tariff exemptions on electronics goods.

“However, we note that Singapore’s electronics upcycle is starting to look mature, and would have to contend with lingering threats of US semiconductor tariffs, with the ultimate downside impact dependent on the eventual conditions, as well as downside risks from any disorderly pullback in exuberant sentiment over the AI boom,” he added.

Precision engineering output grew 12.2 per cent year on year, helped by the machinery and systems segment.

The chemicals segment reported a 2.2 per cent year-on-year rise in output, with expansions in the specialities segment offset by declines in the chemicals and petroleum segments.

General manufacturing was the poorest performer with a 5.6 per cent year-on-year contraction.

Ending on a high

OCBC chief economist Selena Ling said the broad-based growth implies Singapore’s growth “will have legs to end on a strong note in Q4”.

She noted that year-to-date output grew by 7.7 per cent year on year, outperforming the 2.9 per cent recorded over the same period last year.

Maybank economists Chua Hak Bin and Brian Lee said they expect the growth momentum in manufacturing and exports to continue into the first half of 2026.

This is as US tech giants are planning to increase capital expenditure by around 34 per cent next year, opening up more opportunities and growth for Singapore’s tech supply chain.

Manufacturing growth would be supported by rising electronics demand from the AI boom and significant tariff exemptions for most major pharma and semiconductor multinational corporations investing in the US.

“There are other bright spots that will likely carry forward into next year, including falling interest rates, which will support finance, wealth management and real estate; and a sustained construction boom,” the Maybank duo said.