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Industrial output growth slows to 4.6% in April

The strong performance of the biomedical sector helped push Singapore’s manufacturing output higher in April on a year-on-year basis, but the overall growth rate was slower than the previous month as output in the electronics sector shrank after two months of expansion. 

SINGAPORE: The strong performance of the biomedical sector helped push Singapore’s manufacturing output higher in April on a year-on-year basis, but the overall growth rate was slower than the previous month as output in the electronics sector shrank after two months of expansion.

Manufacturing output grew 4.6 per cent last month, according to data released on Monday (May 26) by the Economic Development Board (EDB). That was worse than the expectations of 6.5 per cent growth in a Reuters poll of analysts, and below the 12.1 per cent on-year increase recorded in March.

The biomedical manufacturing sector saw a 23.8 per cent increase in output, accelerating from the 16.4 per cent growth in March. The industry’s performance was key to the expansion in the overall manufacturing performance, with EDB noting that without biomedical manufacturing, manufacturing output declined 0.7 per cent on year.

Other positive contributors included the chemicals cluster, which rose 8.9 per cent on year, with the petrochemicals segment expanding 19.2 per cent as plants continued to ramp up production on the back of expanded capacities.

However, the electronics industry saw a fall in output, contracting 8.8 per cent year-on-year, pulled lower by the semiconductor segment, which fell 11 per cent. The weak performance of the electronics industry followed two strong months of growth, which saw output expand 8.6 per cent in March and 15.2 per cent in February.

Singapore’s manufacturing sector has been battling against an uncertain recovery in the global economy, but conditions may be starting to swing in the Republic’s favour with exports unexpectedly expanding in April, albeit by a marginal 0.9 per cent.

Economists say Singapore's electronics sector may continue to weigh on overall industrial production in the coming months.

Some economists say the slowdown in April did not come as a surprise, and they expect industrial output to pick up later on in the year.

On a seasonally-adjusted month-on-month basis, manufacturing output decreased by 4.7 per cent in April.

Irvin Seah, senior economist at DBS Bank, said: "We're seeing recovery in US, but the recovery is very slow; Eurozone is out of recession but there are still structural issues that need to be resolved; and China is now aiming for a slower pace of growth, so that implies Asia's demand will still be positive but at a lower peak.

"Given that, I think the pull back in the next couple of months in the second quarter is expected, before we see a gradual sustained improvement for the second half of the year." 

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