Factory output up 11.9% last month

Biomedical manufacturing output rose last month on the back of a rise in drug production and a jump in medical technology output driven by higher export demand for medical instruments.
Biomedical manufacturing output rose last month on the back of a rise in drug production and a jump in medical technology output driven by higher export demand for medical instruments.ST FILE PHOTO

Electronics, biomedical surge lifts figure far above economists' forecast of 1.6% contraction

Singapore's factory output jumped 11.9 per cent in November over the same month last year, the fastest pace since March 2014 and better than October's revised 1.3 per cent expansion.

A surprise surge in electronics and biomedical production lifted the headline figure way above private-sector economists' forecast of a 1.6 per cent contraction.

Excluding output from the volatile biomedical cluster, last month's output still grew 6.4 per cent from a year ago, Economic Development Board data showed yesterday.

The pickup in activity closes a choppy year for the economy and is likely to keep Singapore from slipping into a technical recession after contracting 2 per cent in the third quarter compared with the preceding three months, economists said.

  • 34.8%

    Rise in biomedical manufacturing output last month from a year ago.

    24.2%

    Growth in electronics output last month from a year earlier.

"Manufacturing's contribution to fourth-quarter growth will be bigger than previously expected and will help push up full-year growth," said CIMB Private Bank economist Song Seng Wun.

Biomedical manufacturing output rose 34.8 per cent last month from a year ago, on the back of a 36.1 per cent rise in drug production, as well as a 30.8 per cent jump in medical technology output driven by higher export demand for medical instruments.

Electronics output - Singapore's biggest manufacturing cluster - grew 24.2 per cent last month from a year earlier, with semiconductor output up 49.6 per cent.

UOB economist Francis Tan noted that the electronics cluster has been on an expansion path since March.

He said: "The semiconductor segment had grown at double-digit rates over the past nine consecutive months already (compared with each month a year ago), signalling a consistent pickup of demand."

Four of Singapore's six manufacturing clusters were in expansion mode last month.

The precision engineering cluster posted a 7.6 per cent rise in activity while the chemicals cluster grew 3.5 per cent from a year ago.

Still, the recovery was not as broad-based as economists would have liked, with general manufacturing output shrinking 0.9 per cent last month from a year earlier.

Transport engineering contracted 14.8 per cent, dragged down by a 23.6 per cent fall in marine and offshore engineering output.

Mr Tan noted: "However optimistic the electronics cluster may be, it is only 27.4 per cent of total manufacturing activities."

But Mr Song was more upbeat.

He said: "Electronics seems on track to pick up even more in the coming year, especially on the back of a stronger United States economy. Let's keep our fingers crossed.

"The question now is how the services sector will do.

"Performance there has been quite uneven across segments."

A version of this article appeared in the print edition of The Straits Times on December 24, 2016, with the headline 'Factory output up 11.9% last month'. Print Edition | Subscribe