Singapore factory output accelerates 16.4% in February for 4th month of growth

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SINGAPORE – Singapore’s manufacturing output surged last month on robust demand for semiconductors and related , pharmaceuticals and medical devices, data released on Friday (March 26) by the Economic Development Board (EDB) show.

The 16.4 per cent increase in February 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, February production 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 infocomms and consumer electronics segment grew 5.7 per cent.

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

“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 in February, 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 in February.

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 the marine and offshore engineering and aerospace segments continued to slump with oitput falls of 23 per cent and 32.1 per cent respectively.

The levels of 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 in February, 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 GDP (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.

The Government last month kept its 2021 growth forecast at 4 to 6 per cent.

Singapore’s manufacturng sector expanded by 7.3 per cent last year, rebounding from a 1.5 per cent contraction in 2019.

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