Singapore factory output tumbles 8%

Manufacturing in Singapore has been hit by a downswing in the global tech cycle, fallout from an escalating trade war, as well as slowing growth in China. PHOTO: ST FILE

Singapore's factory output last month fared worse than expected, snuffing out hopes of a turnaround and reigniting talk of a technical recession.

The latest data also reinforced expectations that the central bank will ease monetary policy.

Overall manufacturing output tumbled 8 per cent from a year ago, sharply below a 0.6 per cent drop forecast in a Bloomberg poll.

Electronics production saw its biggest monthly slump since 2012, with experts attributing the fall to supply chain disruptions from the trade war. The sector faces more bumps ahead, given that the next wave of US tariffs set to take effect on Dec 15 will affect laptops and phones.

Economists remain divided on whether the latest figures signal an impending technical recession, or two straight quarter-on-quarter declines. However, they expect the Monetary Authority of Singapore to ease the appreciation of the Singdollar next month.

A relatively weaker currency can help to boost demand for tradable goods and services here.

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A version of this article appeared in the print edition of The Straits Times on September 27, 2019, with the headline Singapore factory output tumbles 8%. Subscribe