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SINGAPORE: Singapore’s manufacturing rose 9.4 per cent in February from January, as pharmaceutical firms lifted output to meet demand, according to the Economic Development Board (EDB).
Experts had predicted that output would fall a seasonally adjusted 2 per cent in February, owing to a weak demand for technology products.
Vishnu Varathan, economist at Forecast Ltd, said, "The core strength area on a year-on-year basis was probably transport engineering which has been growing very well since 2006. It is an industry that will continue to fuel growth into 2007.
"The tech numbers look fairly good given the fact that there was the Chinese New Year holiday in February. The U.S. semiconductor book-to-bill ratio has been recovering and we are starting to see that filter into the region. Barring any downturn in the United States, I expect electronics will pick up in the second half."
From a year ago, February factory output rose 0.1 per cent; electronics production fell 2.4 per cent; semiconductors rose 8.6 per cent; disk drives fell 13.2 per cent; and February drugs output fell 8.1 per cent.
"The tech recovery remains relatively sluggish but the offset is coming from transport engineering and pharmaceuticals. If you take the last two months, manufacturing growth is looking better than expected. The momentum from the fourth quarter is carrying over into the first quarter. The tech sector will hopefully show positive year-on-year growth in the second quarter," said Chua Hak Bin, an economist at Citigroup.
Market reaction saw the Singapore dollar stand at 1.5170/80 to the U.S. dollar, compared with 1.5176/81 before the announcement; and the Straits Times Index rise 0.15 per cent to 3,210.65 points by the midday market close. - CNA/yy
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