Singapore’s manufacturing output increased by 16.9% on a y-o-y basis in October, according to preliminary data released by the Singapore Economic Development Board (EDB) on Nov 26.
This marks a return to growth after the 2.2% decline in manufacturing output recorded in September, which had broken the 10-month growth streak preceding it. The figure also beats Bloomberg estimates of 14.5%.
Excluding biomedical manufacturing, output grew 9.7% y-o-y. On a three-month moving average basis, manufacturing output rose 8% in October compared to a year ago.
On a seasonally adjusted m-o-m basis, manufacturing output increased 2.4% in October. Excluding biomedical manufacturing, output grew 1.5%.
All clusters saw output expand during the month. Biomedical manufacturing output saw the biggest jump, expanding 56.1% y-o-y in October, underpinned by a 93.4% expansion in the pharmaceuticals segment from a low production base last year. Conversely, the medical technology segment declined 3% with lower demand for medical devices in some export markets.
On a year-to-date basis, the cluster grew 5.2% y-o-y.
See also: How will the Fed rate cuts affect me?
Transport engineering output grew 35.3% y-o-y in October. The marine & offshore engineering segment rose 77.6% with a higher level of work done in shipbuilding & repairing activities, while the aerospace segment grew 26.9% as demand for maintenance, repair and overhaul activities improved compared to a year ago.
Cumulatively, the transport engineering cluster grew 8.6% in the first ten months of 2021 compared to the same period last year.
Chemicals output grew 15.3% y-o-y in October with all segments recording an increase. The petrochemicals and petroleum segments expanded 16.9% and 15.7% respectively from a year ago, when production was low due to plant maintenance shutdowns and weak export demand amid the Covid-19 outbreak. The other chemicals segment rose 11.7% on account of higher output in fragrances, while the specialties segment grew 9.3% with higher production of mineral oil additives.
See also: MAS set to hold monetary policy as inflation persists
See: Singapore's manufacturing output up by 11.2% y-o-y in August
On a year-to-date basis, the chemicals cluster grew 10.1% compared to the same period a year ago.
Precision engineering output increased 9.1% in October as compared to the same period a year ago. The machinery & systems segment grew 19.6% with higher production of semiconductor equipment to cater to the strong capital investment in the global semiconductor industry. On the other hand, the precision modules & components segment fell 11.2% with lower output of optical products. On a year-to-date basis, the precision engineering cluster grew 19.8% y-o-y.
Electronics output increased 6.5% year-on-year in October, with all segments within the cluster recording a higher level of production. In the first ten months of this year, the electronics cluster grew 17.2% compared to the same period in 2020.
General manufacturing output rose 0.8% y-o-y in October. The miscellaneous industries segment grew 20.2% from a low base last year, when demand for construction-related products was adversely affected by Covid-19. By contrast, the printing segment fell 8.2% while the food, beverage & tobacco segment contracted 10.3% on account of plant maintenance shutdowns and lower production of milk products due to weaker export demand.
On a year-to-date basis, output of the general manufacturing industries cluster grew 6.4%, compared to the same period a year ago.
Following the release of the data by EDB, UOB economist Barnabas Gan has upgraded his full-year manufacturing growth forecast to 12%, up from 8% previously. "The upgrade in our manufacturing outlook also coincides with our recent full-year GDP growth revision to 6.8% (from 6.5%) in 2021," he remarks.
To stay ahead of Singapore and the region’s corporate and economic trends, click here for Latest Section
Gan notes that despite the low base from the previous year, the stronger production momentum in key clusters such as transport engineering and chemicals cannot be discounted. "Most importantly, the growing demand for semiconductors and its related products underpinned Singapore’s electronics and precision engineering clusters, and we continue to see these sectors supporting Singapore’s overall manufacturing landscape," Gan adds.
JP Morgan's Sin Beng Ong notes that October's manufacturing output growth beat his 15.7% estimate. He points out that production excluding biomedical and electronics, which tends to be a useful bellwether of broader capital spending, rose 3.9% on a m-o-m, seasonally adjusted basis.
Photo: Tiong Woon
