Some segments of the beleaguered manufacturing sector appear to be showing tentative signs of staging a comeback, according to data out yesterday.
Still, economists warn that prospects for economic growth and global trade remain cloudy and the coming year will bring significant headwinds.
Factory output expanded 1.2 per cent in October over the same month a year ago, lifted by strong showings in electronics and biomedical manufacturing. This was markedly slower than September's 7.7 per cent growth rate, but slightly higher than economists' forecasts of a 1 per cent uptick.
The numbers from the Economic Development Board yesterday come amid a protracted cyclical downturn in Singapore's trade-dependent economy as global growth continues to flounder.
Manufacturing, which makes up a fifth of the Singapore economy, was hit hard by the slowdown but has recently been showing signs of bottoming out.
Electronics, which makes up about a third of manufacturing output, expanded 24.6 per cent in October compared with the same month last year, driven largely by the semiconductor segment.
This was the electronics cluster's eighth consecutive month of double-digit expansion, in part due to a low base last year, noted UOB economist Francis Tan.
Biomedical output - the second-biggest cluster in manufacturing - grew 11.3 per cent last month, due mostly to increased production in the pharmaceuticals and medical technology segments.
Excluding biomedical manufacturing, total manufacturing output would have fallen 1.4 per cent.
Growth in electronics, biomedical and precision engineering made up for poorer performances elsewhere. The chemicals, general manufacturing and transport engineering clusters all shrank year- on-year.
OCBC economist Selena Ling said last month's data marked a positive start to the fourth quarter for manufacturers.
"If the positive momentum is sustained into the remaining two months of the year, then the fourth quarter could possibly mark the third consecutive quarter of expansion for the sector," she noted, adding that manufacturing should be able to eke out a full-year expansion this year and escape the contraction it experienced in 2015.
Still, the coming year is expected to be a tough one given slowing growth in China, mounting backlash against globalisation around the world and lingering Brexit uncertainties, Ms Ling said.
Mr Tan said the transport engineering cluster is also still stuck in the doldrums due to low oil prices, which have been hindering investment in the industry.