Singapore factory output shrinks most in over three years with 4.8% drop in March

Workers at a facility that designs and manufactures high-value medical devices and lab equipment, on Feb 11, 2019.
Workers at a facility that designs and manufactures high-value medical devices and lab equipment, on Feb 11, 2019.ST PHOTO: KUA CHEE SIONG

SINGAPORE - Singapore's manufacturing activity in March fell again into negative territory after a brief respite in February, dragged down by the electronics and precision engineering segments that shrank by double-digit figures.

The overall manufacturing sector contracted by 4.8 per cent compared to a year ago, according to statistics released by the Economic Development Board (EDB) on Friday (April 26).

This was the steepest decline in more than three years. The previous record was in December 2015, when the sector shrank by 11.9 per cent year on year.

Excluding the biomedical manufacturing cluster, which is more prone to volatility than the other clusters, factory output tumbled 8.7 per cent.

Factory performance in March had fallen below expectations as economists had forecast a 4.6 per cent decline, according to a Bloomberg consensus poll.

It also contrasts with the 2.6 per cent output growth in February, which was revised up from an earlier estimate of 0.7 per cent. Overall manufacturing fell by 2.6 per cent on a seasonally adjusted month-on-month basis in March.

Three out of six industry clusters clocked declines, with the electronics cluster the worst-performing. Its output fell 15.3 per cent year on year, following an unexpected 2.8 per cent rise in February.

 
 

Within the electronics cluster, the infocomm and consumer electronics and the other electronic modules and component segments grew, while all others recorded declines, noted the EDB. Output for the data storage segment, in particular, plunged by 38.9 per cent year on year, extending from the sharp descent of 27 per cent seen in February.

The precision engineering cluster recorded a 13.3 per cent fall last month, continuing its slide from February by the same amount. EDB said the precision modules and components segment had contracted by 22.8 per cent due to lower production of optical and cable products.

Th chemicals cluster also logged a 2.7 per cent decline year on year in March, which saw almost all of its segments, such as petroleum, petrochemicals and specialties, recording declines.

On the flip side, biomedical manufacturing output rose the most - by 13.7 per cent last month on the back of strong performances in the pharmaceuticals and medical technology segments.

The general manufacturing cluster saw a 5.8 per cent year-on-year increase last month, led by expansions in the food, beverage and tobacco segment due to higher production of infant milk and dairy goods.

Transport engineering, too, went up by 1.8 per cent in March compared to a year ago, with more repair and maintenance jobs from commercial airlines seen last month. However, there were also lower levels of offshore projects and shipbuilding and repairing activities, noted the EDB.