Singapore's manufacturing slump deepened last month, with factory output falling 6.9 per cent from a year ago as the electronics sector continued to hurt from the falling-out between the United States and China.
The fall was the sharpest since output plunged 11.9 per cent in December 2015, mainly because of a shrinkage in the marine and offshore segment.
June's figures showed the fourth straight month of contraction and come after a revised 2 per cent drop in May, according to the Economic Development Board yesterday.
A Bloomberg poll showed that economists expected worse, tipping an 8.5 per cent drop. But, excluding the volatile biomedical manufacturing sector, production last month fell by a bigger 9.9 per cent.
On a seasonally adjusted monthly basis, output rose 1.2 per cent in June compared with May's revised 0.1 per cent dip. But output fell 2.9 per cent when biomedical manufacturing was excluded.
Singapore's struggling electronics sector continued to be the worst performer despite accounting for a third of factory production last year.
Output fell 18.8 per cent in June compared with a year ago. All segments recorded lower production figures except for data storage.
Maybank economists Chua Hak Bin and Lee Ju Ye said the sector continued to hurt after the US placed China's Huawei on a trade blacklist, which intensified and disrupted the global supply chain. Another factor was Japan's export controls on South Korea, Ms Lee added.
CIMB Private Banking economist Song Seng Wun said the decline in the electronics sector last month almost fully accounted for the overall 6.9 per cent drop. Figures could have been worse if not for the 5 per cent year-on-year growth in the biomedical cluster, which contributed 0.7 percentage point to last month's overall output figure, he said.
Output in the electronics sector was down 6.9 per cent in the first six months of this year, compared with the same period last year.
General manufacturing, which recorded a 10.8 per cent increase in output, and biomedical manufacturing, with a 5 per cent increase, were the best performers. They were the only clusters with cumulative growth for the first six months of this year.
General manufacturing industries grew by 4.3 per cent from January to June this year, compared with the same period last year, and biomedical manufacturing grew by 9.6 per cent. A 22.2 per cent jump in the food, beverages and tobacco segment last month, compared with the same period last year, boosted the general manufacturing sector, offsetting a 14.8 per cent fall in printing.
Pharmaceutical output was up 5.3 per cent last month and medical technology output also rose 4.2 per cent compared with the same period last year. Precision engineering output edged up 0.3 per cent last month compared with a year ago, but it fell by 8.3 per cent in the first six months of this year overall, compared with the same period last year.
Output in the chemicals industries fell 3.3 per cent last month, dragged down by a 12.3 per cent decline in the petrochemicals segment because of maintenance shutdowns in some plants. The sector shrank by 0.1 per cent in the first six months of this year, compared with the same period last year.
Transport engineering output fell 14.2 per cent last month,despite the growth in the land transport (15.3 per cent) and aerospace (7.3 per cent) segments. A 33.3 per cent decline in the marine and offshore engineering segment was the main culprit for the overall contraction last month compared with a year ago.
