Singapore’s manufacturing output up 7.6% in November

Singapore’s manufacturing output up 7.6% in November

Singapore’s manufacturing output increased 7.6 per cent year-on-year in November, the Singapore Economic Development Board (EDB) said on Wednesday (Dec 26), helped by a jump in pharmaceuticals output as well as strong expansion in the marine and offshore engineering cluster. Brandon Tanoto reports. 

SINGAPORE: Singapore’s manufacturing output increased 7.6 per cent year-on-year in November, the Singapore Economic Development Board (EDB) said on Wednesday (Dec 26), helped by a jump in pharmaceuticals output as well as strong expansion in the marine and offshore engineering cluster. 

Excluding biomedical manufacturing, output rose 5.3 per cent.

Meanwhile, on a seasonally adjusted month-on-month basis, it increased 2.8 per cent. Output remains unchanged when biomedical manufacturing is excluded.

Output in the biomedical manufacturing cluster increased 18.5 per cent in November as compared to the year ago month. Pharmaceutical output grew 23.9 per cent with higher production of active pharmaceutical ingredients and biological products, according to the release. The medical technology segment increased 6.6 per cent.

The biomedical manufacturing cluster’s output increased 8.1 per cent on a year-to-date basis, compared to the same period in 2017.

The transport engineering cluster saw an 11.3 per cent increase in output year-on-year, with all segments recording output growth.

Electronics output went up 11.2 per cent year-on-year, with the semiconductors, infocomms & consumer electronics and other electronic modules & components segments increasing 16.5 per cent, 12.6 per cent and 3 per cent respectively, EDB said.

The cluster’s cumulative output increased 9.5 per cent year-on-year from January to November, compared to a year ago, despite a dip in the data storage and computer peripherals segments.

Meanwhile, the chemicals cluster recorded a 3.4 per cent output increase year-on-year. This is due in part to growth in the other chemicals and specialties segments, which went up 18.7 per cent and 6.6 per cent respectively. A higher output in fragrances boosted the other chemicals segment, while specialties saw a higher output in industrial gases and mineral oil additives, EDB added.

However, maintenance shutdowns caused a 5.3 per cent and 10.9 per cent decline in the petroleum and petrochemicals segment respectively.

Overall, the chemicals cluster output went up 5.4 per cent in the first 11 months of this year compared to the same period in 2017.

The printing segment fell 11 per cent, though the food, beverages & tobacco and miscellaneous industries fared better, recording a 1 per cent and 0.3 per cent rise respectively.

The overall cluster output from January to November rose 0.7 per cent, as compared to a year ago.

The precision engineering segment saw an 8.2 per cent dip in November.

Despite this, the cluster recorded a 5.6 per cent growth in the first 11 months compared to the same period last year.

“The improvement in the manufacturing performance in November was partly contributed to by the pharmaceuticals cluster, but this means that sustainability will be an issue since this segment is known for its high volatility,” said Dr Tan Khay Boon, a senior lecturer at SIM Global Education. 

“The good performance in transport engineering was mainly due to the strong growth in the marine and offshore engineering segment, which was supported by high oil prices. 

“With the trend of oil prices moving downwards, the good performance in this cluster may not last. The positive news is in the improvement of the electronics cluster, but the trade tension between the US and China is a concern in the near future for Singapore's manufacturing sector.”

UOB said the 90-day truce between the US and China “may have given manufacturing (especially electronics production here) a new lease of life, albeit temporarily”.

It also warned that if the current increase is mainly due to the frontloading of imports before the potentially higher tariffs kick in after Mar 1, then the resulting payback in 2019 is “likely to be magnified and translating to a weaker manufacturing growth next year”.

UOB had earlier forecast a full-year manufacturing growth of 7.7 per cent for 2018, up from the previous 7 per cent, implying a December industrial production (IP) growth forecast of 2.6 per cent year-on-year. However, it maintained a GDP growth forecast of 3.4 per cent, which implies a Q4 growth forecast of 2.6 per cent year-on-year.

“But the uptick in Oct/Nov manufacturing may add further upside to that forecast,” it said.

However, UOB added that it still expects IP to moderate next year, projecting a 2.5 per cent growth in 2019, down from the previous 3 per cent.

“We also continue to be cautious about Singapore’s manufacturing sector due to the high base effect and the global electronics slowdown which could eventually take a more material toll on the electronics cluster,” it said. “Another main negative factor is the rocky global trade developments (i.e. US and China) with potential negative spill-overs to manufacturers here, both in terms of slowdown in export orders and business sentiments. Weaker China growth in 2019 will also pose a drag on Singapore’s goods and services demand.

“That said, some of the negative impact to trade may be offset by relocation of production into South East Asia, and that may benefit Singapore’s manufacturers and trade-related services and cushion some of the loss in demand from China, but the potential time lag between relocating production into ASEAN and reaping the relocation benefits will still mean downside growth risk to manufacturing in 2019."

Source: CNA/ga(ms)

Bookmark