S’pore factory output rises at slower pace of 9.8% in Sept after jump in August
The electronics industry, which accounts for nearly half of Singapore’s factory output, saw output inch up 1.9 per cent, after a 50 per cent jump in August.
SINGAPORE - Singapore’s total manufacturing output rose for a third straight month in September, though the key electronics industry saw a slower pace of growth.
Economists told The Straits Times that Singapore’s manufacturing recovery may stay on track despite the economic and geopolitical risks to global trade.
With the smaller rise in electronics production, total output grew 9.8 per cent from a year ago, down from the revised 22 per cent jump in August, data from the Economic Development Board (EDB) on Oct 25 showed.
Excluding the volatile biomedical manufacturing, factory output rose 4.5 per cent.
On a seasonally adjusted month-on-month basis, output was largely unchanged from August. Excluding biomedical manufacturing, it dropped 7.6 per cent.
UOB associate economist Jester Koh called September’s growth “remarkably resilient” and said it might mean an upward revision to Singapore’s gross domestic product for the third quarter of the year.
Meanwhile, Maybank analysts Chua Hak Bin and Brian Lee said the electronics recovery might remain intact despite the slower output growth in September.
“That said, there are risks to Singapore’s export and manufacturing recovery on the horizon. These include more tariff barriers and a bigger US-China trade war (which could ensue from a Trump election win in November), an escalation of geopolitical conflicts in the Middle East, and a United States economic slowdown,” they said.
DBS Bank economist Chua Han Teng said that an escalation of ongoing geopolitical conflicts and protectionist measures could potentially dampen the pace of Singapore’s manufacturing and trade growth.
These measures could disrupt global supply chains and result in a more fragmented trade landscape, he added.EDB’s September data showed that all industries saw higher output, except for transport engineering.
Electronics production, which accounts for nearly half of Singapore’s manufacturing output, grew 1.9 per cent in September, down from a hefty 50 per cent in August.
But DBS’ Mr Chua said: “The global semiconductor industry is recovering well, and the upcycle has more runway, which will bode well for Singapore’s electronics firms.
“We continue to expect Singapore’s electronics firms to capitalise on the opportunities driven by the replacement of smartphones and PCs, as well as the broadening adoption of artificial intelligence applications.”
He added that external demand for Singapore’s electronics products remains supported, with new export orders growing for the 10th straight month through September.
Within electronics, semiconductor output grew 3.1 per cent year on year, compared with a 55.7 per cent surge in August, while the infocomms and consumer electronics segment contracted 23 per cent, reversing the previous month’s 28.5 per cent expansion.
Computer peripherals and data storage production rose 25.8 per cent, while the other electronic modules and components grew 4.4 per cent.
Overall, the electronics cluster grew 4.6 per cent for the period from January to September 2024, compared with the same period a year ago.
Biomedical manufacturing output jumped 62 per cent year on year, led by pharmaceutical production surging 143.9 per cent. The medical technology segment grew 0.9 per cent to meet continued export demand for medical devices.
Overall, the biomedical manufacturing cluster contracted 13.8 per cent in the first nine months of 2024 compared with the same period in 2023.
Growth was also seen in the precision engineering industry, with output increasing 14.7 per cent in September.
The machinery and systems segment expanded 16.8 per cent, led by strong production of front-end semiconductor equipment, EDB noted. The precision modules and components segment also increased, by 3.8 per cent, supported by higher output of optical instruments, plastic precision components and electronic connectors.
The general manufacturing industry also saw output grow by 8.1 per cent. Within this industry, the food, beverages and tobacco segment grew 16.2 per cent on account of higher output of beverage concentrates, cocoa and bakery products, EDB said.
On the other hand, the miscellaneous industries and printing segments declined.
The chemicals industry saw output grow by 3.4 per cent in September. This was led by the other chemicals segment, which rose 18.7 per cent with higher output of fragrances. The specialities segment grew 17.6 per cent on account of higher production of food additives and biofuels, EDB said.
Conversely, the petroleum and petrochemicals segments declined, in view of plant maintenance shutdowns.
The only industry to record a drop in output in September was transport engineering, with a 1.9 per cent decline. The aerospace segment shrank 2.9 per cent, while the marine and offshore engineering segment fell 9.8 per cent due to fewer project milestones being reached.
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