Singapore’s manufacturing output fell 0.4% in July, narrower than economists' forecast

Singapore’s manufacturing output fell 0.4% in July, narrower than economists' forecast

factory Singapore
A worker at a manufacturing facility in Singapore. (Photo: TODAY)

SINGAPORE: Singapore’s manufacturing output decreased 0.4 per cent in July as compared to the previous year, amid slower economic growth in the second quarter of the year, data from the Economic Development Board (EDB) showed on Monday (Aug 26).

That compares with a revised 8.1 per cent contraction in June. The median forecast in a Reuters survey predicted a 4.9 per cent drop for July.

On a seasonally adjusted month-on-month basis, output went up 3.6 per cent.

Excluding biomedical manufacturing, output fell 0.7 per cent year-on-year.

General manufacturing recorded the highest increase in July, with 6.9 per cent year-on-year. 

High production of metal tanks and containers, as well as wearing apparel, contributed to a 10.8 per cent growth in the miscellaneous industries segment. 

The food, beverage and tobacco segment also expanded 7 per cent with a higher beverage products output, the data showed.

Chemicals output increased 2.2 per cent year-on-year, with the other chemicals segment experiencing a 13.1 per cent growth. The petrochemicals and petroleum segments contracted, however, mainly due to maintenance shutdowns in some plants.

The biomedical cluster saw a 0.8 per cent growth year-on-year, with the medical technology expanding 17.7 per cent, supported by higher export demand for medical devices.

Meanwhile, precision engineering saw the biggest decline, at 7.5 per cent year-on-year, despite a 6.7 per cent growth in the precision modules and components segment, the data showed.

“Overall, the precision engineering cluster fell 8.7% in the first half of 2019,” said EDB.

The electronics cluster also contracted year-on-year, by 0.9 per cent. This is despite growth in the data storage and semiconductors segments, at 1.8 and 0.3 per cent respectively. The cluster’s output fell a cumulative 5.6 per cent in the first seven months of the year, compared to the same period last year, said EDB.

The transport engineering cluster’s output fell 0.2 per cent in July as compared to a year ago. Within the cluster, the aerospace segment saw an increase of 10.8 per cent as repair and maintenance jobs from commercial airlines increased. 

However, marine and offshore engineering segment also shrank 10.8 per cent, as it recorded less offshore, shipbuilding and repairing activities. Land engineering saw a decline as well, at 0.7 per cent.

The negative year-on-year manufacturing growth in July is "not surprising", while the fact it was a more moderated decline "can be viewed as positive", said Dr Tan Khay Boon, senior lecturer at Singapore Institute of Management (SIM) Global Education.

"However, it is too early to say that the worst is over as the trade dispute between China and the US still shows no signs of easing and can potentially turn nastier," he said, adding that the electronics cluster remained weak as it saw the greatest impact from the trade dispute. 

"The transport engineering output was still negative as the improvement in the aerospace segment was insufficient to offset the decline in the marine and offshore engineering segment.

"On the other hand, the biomedical manufacturing cluster showed some signs of recovery, cushioned by the medical technology’s good performance," Dr Tan added. 

Source: CNA/ga(mn)