- POSTED: 26 Dec 2013 23:45
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Singapore's manufacturing output expanded at a lower-than-expected pace in November, which economists say could weigh on fourth-quarter economic growth.
SINGAPORE: Singapore's manufacturing output expanded at a lower-than-expected pace in November, which economists say could weigh on fourth-quarter economic growth.
But beyond the year-end sluggishness, most economists see better growth prospects for Singapore in 2014, helped by a recovery in the advanced economies.
Dragged down by lower output from the biomedical and chemicals sectors, Singapore's manufacturing output growth slowed to 4.0 per cent in November, lower than economists' expectation of 5.7 per cent growth and down from the 8.3 percent growth in October.
Economists say the weakness in November's production numbers is likely to weigh on fourth-quarter GDP growth.
"We do expect a marginal correction in fourth-quarter GDP. We've pencilled in minus 2.0 per cent quarter-on-quarter for the fourth quarter, and that will imply 4.5 per cent year-on-year growth for the fourth quarter,” said Michael Wan, analyst for Asia Ex-Japan Economics at Credit Suisse.
“Moving into 2014, with US growth picking up, and with Europe continuing its move towards recovery from recession, we do expect growth to improve in 2014."
In November, electronics output expanded 11.0 per cent on-year.
Transport engineering output increased 6.3 per cent, supported by higher contributions from aircraft engine repair jobs and rig building projects.
Meanwhile, biomedical output contracted 2.1 per cent, mainly due to lower pharmaceuticals output.
Chemicals output fell 2.7 per cent, hit largely by a 17.2 per cent contraction in the petroleum segment.
Still, most economists see better growth prospects next year, in line with signs of recovery in the US, the eurozone and Japan. Trade-dependent economies like Singapore are expected to benefit.
“Singapore should see some improvement in manufacturing output next year,” said Rajiv Biswas, Asia-Pacific chief economist at IHS.
“We're forecasting quite a significant upturn for Singapore manufacturing output, from growth of only about one per cent this year, to about four per cent next year. So that's quite a big recovery for Singapore manufacturing in the year ahead."
Research firm IHS expects world growth to rebound to 3.3 per cent next year, from 2.5 per cent this year. It is also forecasting world trade to pick up to 4.7 per cent in 2014, up from 2.0 per cent this year.