Singapore’s factory output jumped 11.9% in November over the same month last year, the fastest pace since March 2014 and better than October’s revised 1.3% expansion.
A surprise surge in electronics and biomedical production lifted the headline figure way above private-sector economists’ forecast of a 1.6% contraction, Channel NewsAsia reported.
Excluding output from the volatile biomedical cluster, last month’s output still grew 6.4% from a year ago, Economic Development Board data showed Friday.
The pickup in activity closes a choppy year for the economy and is likely to keep Singapore from slipping into a technical recession after contracting 2% in the third quarter compared with the preceding three months, economists said.
“Manufacturing’s contribution to fourth-quarter growth will be bigger than previously expected and will help push up full-year growth,” said CIMB Private Bank economist Song Seng Wun.
Biomedical manufacturing output rose 34.8% last month from a year ago, on the back of a 36.1% rise in drug production, as well as a 30.8% jump in medical technology output driven by higher export demand for medical instruments.
Electronics output—Singapore’s biggest manufacturing cluster—grew 24.2% last month from a year earlier, with semiconductor output up 49.6%.
United Overseas Bank economist Francis Tan noted that the electronics cluster has been on an expansion path since March. He said: “The semiconductor segment had grown at double-digit rates over the past nine consecutive months already (compared with each month a year ago), signaling a consistent pickup of demand.”
Four of Singapore’s six manufacturing clusters were in expansion mode last month. The precision engineering sector posted a 7.6% rise in activity while the chemicals industry grew 3.5% from a year ago.
Output of the precision engineering cluster grew 7.6%, compared to a year ago. The machinery and systems segment grew 10% as export demand for semiconductor-related equipment increased, while the precision modules and components segment recorded higher output of industrial rubber and dies, moulds, tools, jigs and fixtures.
Still, the recovery was not as broad-based as economists would have liked, with general manufacturing output shrinking 0.9% last month from a year earlier. Transport engineering contracted 14.8%, dragged down by a 23.6% fall in marine and offshore engineering output.
Tan noted: “However optimistic the electronics cluster may be, it is only 27.4% of total manufacturing activities.”
