Singapore manufacturing output jumps 13.1% in June, blowing past forecasts


An employee makes a final inspection on panels during a tour of an REC solar panel manufacturing plant in Singapore.
An employee makes a final inspection on panels during a tour of an REC solar panel manufacturing plant in Singapore.PHOTO: REUTERS

SINGAPORE - Singapore's manufacturing sector extended its winning streak in June as output rose for the 11th straight month, with year-on-year growth accelerating to 13.1 per cent, the highest this year.

June's performance blew past the 8.5 per cent growth forecast by analysts in a Bloomberg poll.

It was more than triple the 4.4 per cent increase in May, revised down from a 5 per cent estimate.

On a seasonally adjusted month-on-month basis, factory output grew 9.7 per cent in June, beating the 3.6 per cent forecast by analysts. Excluding biomedical manufacturing, output grew 4 per cent, the Economic Development Board said on Wednesday (July 26).

Get The Straits Times
newsletters in your inbox

The electronics cluster's output remained the star performer, jumping 25.5 per cent in June, compared to the same month last year. This was mainly due to the semiconductors segment which posted a robust 37.4 per cent growth.

But the cluster's growth was partially offset by declines in the infocomms & consumer electronics (-1.7 per cent) and data storage (-17.4 per cent) segments.

The biomedical manufacturing cluster remains a bright spot, growing 18.3 per cent in June 2017 compared to a year ago.

Pharmaceuticals output grew 21.4 per cent, on account of higher production of active pharmaceutical ingredients and biological products. The medical technology segment grew 8.5% with higher export demand for medical devices.

DBS Group Research, in a report before EDB's release, expected a good showing in June industrial output.

"Headline industrial production index for the month is likely to come in at 12.4 per cent year on year, it said. "The pharmaceutical industry had a rough patch over the past two months and is due for a rebound. The cluster is known for its volatile industry specific cycle. After two months of shutdown in some of the key plants for routine maintenance, we expect production to be ramped up with a new product mix.

 

"Moreover, while the electronics rally appears to be tapering off, output growth is still holding up strongly at about 30-plus per cent level. Key leading indicators like semiconductors billings and shipments are showing some signs of lethargy but far from a decline. In fact, we expect capacity utilisation rate within the electronics cluster to remain high even as production output runs sideways," DBS said.

The chemicals cluster's output increased 9.4 per cent on a year-on-year basis in June, with all segments registering output growth. Growth in the cluster was largely led by the other chemicals and petrochemicals segments, which grew 18.1 per cent and 12.8% per cent respectively.

Output of the precision engineering cluster grew 5.3 per cent year-on-year in June 2017. The precision modules & components segment increased 7.4 per cent with higher production of dies, moulds, tools, jigs & fixture, industrial rubber products and metal precision parts.

The transport engineering cluster's output grew 4.6 per cent year-on-year in June, with aerospace and land transport segments expanding 24.9 per cent and 23.9 per cent respectively.

The former reported a higher level of repair and maintenance activity from commercial airlines while the latter recorded higher production of motor vehicle parts.

But the marine & offshore engineering segment remained weak, falling 11.8 per cent.

Output of the general manufacturing industries cluster fell 5.3 per cent in June on a year-on-year basis, with all segments recording declines.