Singapore’s manufacturing output expanded 27.5% y-o-y in June, according to data released by the Singapore Economic Development Board (EDB) on July 26.
This marks the eighth consecutive month of growth, though easing slightly from the 30% y-o-y growth recorded in May.
Excluding biomedical manufacturing, output increased 24.8%.
On a three-month moving average basis, manufacturing output increased 17.7% y-o-y in June. On a seasonally adjusted m-o-m basis, manufacturing output decreased 3.0%. Excluding biomedical manufacturing, output grew 0.7%.
Similar to May, all sectors saw broad-based growth.
Biomedical manufacturing output increased 42.5% y-o-y in June. This comprises a 45.2% y-o-y expansion for the pharmaceutical segment expanded 45.2% with higher production of active pharmaceutical ingredients and biological products, as well a 37.5% y-o-y expansion for the medical technology segment on the back of higher export demand for medical devices.
For the 1H2021, the biomedical manufacturing cluster grew 5% compared to the same period in 2020.
Chemicals output increased 30.6% y-o-y in June, driven by growth in all segments. In particular, the specialties and petroleum segments expanded 53.6% and 32.3% y-o-y respectively from a year ago, when production was low due to plant maintenance shutdowns and weaker export demand amid the COVID-19 outbreak.
On a year-to-date basis, the chemicals cluster grew 13.3% y-o-y for the 1H2021.
Transport engineering output expanded 28.3% y-o-y in June, with all segments recording an increase. The marine & offshore engineering segment rose 44.2% due to movement restrictions at foreign worker dormitories which adversely affected production last year. The aerospace segment grew 17.5% from a low base of maintenance, repair and overhaul activities last year due to international travel restrictions amid the Covid-19 pandemic.
The transport engineering cluster fell 0.9% y-o-y for the 1H2021.
For electronics, output expanded 26.2% y-o-y in June, with all segments except for infocomms & consumer electronics recording growth. In particular, the semiconductors segment grew 28.2%, supported by demand from cloud services and 5G markets.
Overall, the electronics cluster grew 23.6% y-o-y in the 1H2021.
Precision engineering saw a 22.2% y-o-y expansion in June. The machinery & systems segment grew 28.6% with higher output of semiconductor and industrial process equipment. The precision modules & components segment rose 13.9% with increased production of metal and plastic precision components, as well as dies, moulds, tools, jigs and fixtures. Overall, the precision engineering cluster grew 19.3% y-o-y for the 1H2021.
General manufacturing output rose 17.4% compared to a year ago. The miscellaneous industries segment rose 62.2% due to the low base last year as production of construction-related materials were affected by movement restrictions at foreign worker dormitories.
Conversely, the food, beverage & tobacco and printing segments fell 2.4% and 5.9% respectively, with the former recording lower production of milk products due to weaker export demand.
For the 1H2021, output of the general manufacturing industries cluster grew 7.5% compared to the same period a year ago.
UOB economist Barnabas Gan says June's manufacturing growth of 27.5% y-o-y is in line with his expectations, supported by low base effects as well as the resilient global demand for semiconductor-related products, which he believes underpinned the expansion for electronics and precision engineering output.
However, he notes that manufacturing growth for the 2Q2021, which came in at 17.7% on a y-o-y basis, was slightly below the advance estimates by the Ministry of Trade and Industry (MTI) of 18.5%.
Nonetheless, Gan remains upbeat that electronics and precision manufacturing engineering will continue supporting the manufacturing sector, and has kept his manufacturing growth outlook at 8.0% in 2021. "The rosier manufacturing environment also reinforces our recent call to upgrade Singapore’s GDP growth to 6.5%, from a prior 5.5% outlook," he adds.
RHB Group Research's Singapore research team estimates that manufacturing IPI will peak in July due to the low base in 2020 before easing into the consequent months in the 3Q2021 following a higher base.
That said, it notes that there is already a slow down in manufacturing activities based on monthly momentum.
"The resilient global demand from the semiconductor industry and the 5G market is expected to continue to support output production in the precision engineering and electronics clusters. The gradual revival of external demand should also contribute to growth in most sectors but growth in the transport engineering sector is expected to still be impacted by closure of international borders," writes the team.
Photo: Tiong Woon
