S'pore factory output rose 16.4% in February

Singapore's manufacturing output surged last month on robust demand for semiconductors and related equipment, pharmaceuticals and medical devices, according to data released yesterday by the Economic Development Board (EDB).

The 16.4 per cent increase in last month's production from a year ago topped the 15.8 per cent growth forecast by analysts in a Bloomberg poll and the upwardly revised 9.2 per cent rise in January.

It also marks a fourth straight month of factory growth.

Excluding biomedical manufacturing, output last month expanded 13.6 per cent year on year.

The key electronics cluster saw output swell 30.3 per cent.

The semiconductor segment recorded 36.5 per cent growth, supported by demand from 5G markets and a low production base a year ago, EDB said.

The infocomm and consumer electronics segment grew 5.7 per cent.

UOB economist Barnabas Gan said further growth in the electronics cluster can be expected in the year ahead.

"This is on the back of the gain in global semiconductor-related demand, amid the increase in digital solutions adoption such as 5G technology and cloud computing around the world," he said.

The precision engineering cluster expanded by 15 per cent, driven by the machinery and systems segment, which swelled 23.5 per cent due to high demand for semiconductor equipment. But the precision modules and components segment declined 4.5 per cent, with lower production of dies, moulds, tools, jigs and fixtures.

Biomedical manufacturing rose 23.9 per cent year on year last month, as pharmaceuticals output grew 16.7 per cent, while the medical technology segment expanded 12.6 per cent, with higher export demand for medical devices.

The chemicals cluster inched up 2.5 per cent, with two segments recording output growth. The specialities segment grew 8.7 per cent, with higher production of industrial gases and additives, while the petrochemicals segment grew 6.1 per cent from a low base last year due to maintenance shutdowns.

However, the other chemicals and petroleum segments declined 3.3 per cent and 25.3 per cent, respectively.

Other clusters saw output shrink last month.

General manufacturing declined by 5.5 per cent year on year, due in part to the Chinese New Year holidays.

Transport engineering output fell 24.2 per cent. The land segment rose 20.3 per cent, with higher output of parts and accessories for motor vehicles, but the marine and offshore engineering and aerospace segments continued to slump, with output falls of 23 per cent and 32.1 per cent, respectively.

Activity in the shipyards and aerospace firms remained low as new orders were still adversely impacted by the weak global oil and gas market and travel restrictions, respectively, said EDB.

On a seasonally adjusted month-on-month basis, manufacturing output increased 1.6 per cent. Excluding biomedical manufacturing, output dipped 0.1 per cent.

Given the better than expected expansion last month, UOB has raised its forecast for manufacturing growth this year to 5.5 per cent, from 3 per cent previously.

This will also lift the bank's full-year gross domestic product growth forecast to 5.5 per cent from 5 per cent, with first-quarter growth now pencilled in at 0.8 per cent year on year.