Singapore factories kept powering ahead last month as the improving global economy lifted trade and export demand. Economists credit the resurgent manufacturing sector for helping the economy kick off the year on a strong footing, so much so that growth numbers for the first quarter which came in at 2.5 per cent could be revised upwards. ANZ tipped the revision to come in at 2.7 per cent, assuming the other sectors are unchanged.

Factory output jumped 10.2 per cent in March over the same month last year - stronger than economist expectations of a 5.8 per cent rise.

Manufacturing, which makes up one-fifth of the economy, is benefiting from a more positive global outlook and strong demand for electronics, especially semiconductors.

But performance across the sector has been uneven, with some segments surging and others flagging.

March's robust showing was again attributed mainly to the electronics cluster, where output swelled 37.7 per cent.

The strong run in electronics has been propelled principally by consumer demand, said DBS senior economist Irvin Seah. "Much will depend on companies increasing their (capital expenditures) in the coming months, which will then provide the cluster with a second wind," he added.

Other clusters also fared well: Precision engineering expanded by 12.8 per cent, while chemicals output rose 3.5 per cent from a year earlier.

This made up for declines elsewhere, including the transport engineering cluster. It shrank 15.6 per cent as the marine and offshore engineering segment remained weak.

Even if the heady pace of electronics output growth - especially semiconductors - slows in the coming months, manufacturing is still likely to be the key growth engine this year, said OCBC Bank's head of treasury research and strategy, Ms Selena Ling.

Manufacturing output expanded 8 per cent in the first quarter, after taking into account a downward revision in February's data, she added. This is up from an earlier estimate of 6.6 per cent, and should similarly boost overall first-quarter economic growth.

The pick-up in manufacturing has been accompanied by strong export growth, with non-oil domestic exports rising 16.5 per cent year-on-year in March - the fifth straight month of expansion.

If the export recovery persists, it will "eventually trigger a similarly broad recovery in (manufacturing)", said ING's chief Asia economist Tim Condon.