Singapore manufacturing output shrank 4.4% in June, much worse than expected

An employee working at a manufacturing facility at Tuas.
An employee working at a manufacturing facility at Tuas. PHOTO: ST FILE

SINGAPORE - Singapore's manufacturing output shrank 4.4 per cent year-on-year in June, according to latest data by the Economic Development Board (EDB) released on Friday.

This is way below the median estimate of a 0.4 per cent decline in a Reuters poll of economists.

It follows May's 1.7 per cent drop, revised up from an earlier estimate of an 2.3 per cent decline.

Excluding biomedical manufacturing, factory output in June fell 5.3 per cent year-on-year.

On a seasonally adjusted month-on-month basis, output decreased 3.3 per cent in June. Excluding biomedical manufacturing, output fell 4.6 per cent.

EDB's data follows the government's advance estimate of second-quarter gross domestic product released last week, which showed that manufacturing in the April-June quarter contracted 4.0 per cent from a year ago and shrank 14.0 per cent from the previous quarter.

Worse hit in June was the transport engineering cluster whose output fell 17.5 per cent year-on-year, EDB's figures show. Weak demand for engine repair jobs continued to put a drag on the aerospace segment which fell 15.7 per cent. The marine & offshore engineering segment contracted 21.7 per cent due to lower levels of rig building and shipbuilding & conversion activities. For the first half-year, output of the transport engineering cluster fell 9.7 per cent compared to the same period last year.

The important electronics cluster saw production fall 2.1 per cent year-on-year in June. All segments, except for semiconductor, grew. For the first half-year, output of the electronics cluster declined 1.2 per cent compared to the same period last year.

Output of the chemicals cluster increased 4.2 per cent year-on-year in June, on the back of specialities and other chemicals segments. The specialities segment posted robust growth of 11.3 per cent due to expanded production capacities, while output of the other chemicals segment grew 9.0 per cent on account of higher demand for glass products. The petroleum segment, however, contracted 5.2 per cent, mainly due to plant maintenance shutdown. In the first six months of this year, output of the chemicals cluster rose 3.5 per cent from the year-ago period.

The biomedical manufacturing cluster's output dipped 0.6 per cent in June compared to a year ago. The medical technology segment continued to post higher output as demand for medical devices and supplies remained strong, but this was offset by contraction in the pharmaceuticals segment. On a year-to-date basis, output of the biomedical manufacturing cluster decreased 7.6 per cent compared to the same period a year ago.

Output of the general manufacturing industries cluster contracted 3.3 per cent in June. In the first half of 2015, production decreased 1.8 per cent year-on-year.

The precision engineering cluster's output fell 5.0 per cent year-on-year in June 2015. On a year-to-date basis, output of the cluster declined 1.8 per cent compared to the same period last year.