Singapore"s manufacturing output up 12.8% on-year in February

SINGAPORE: Singapore’s manufacturing output grew 12.8 per cent in February from a year ago — the fastest pace of expansion since December 2011.

The growth was boosted by strong expansion in the production of pharmaceuticals and petrochemicals.

On a month-on-month basis, manufacturing output rose by 6.2 per cent.

February’s growth was largely in line with market expectations.

Factories in Singapore turned out more goods last month.

According to the Economic Development Board, manufacturing output rose 12.8 per cent on-year in February, compared to the 4.4 per cent growth in the previous month.

February’s expansion was driven by growth in all clusters.

Biomedical manufacturing gained 19.3 per cent, boosted by pharmaceuticals, which grew 20.2 per cent.

Electronics production rose 14.8 per cent, while the output of the transport engineering cluster increased 11.1 per cent on-year.

Some economists said the sharp increase in manufacturing output last month was due to the low base in February 2013, where some factories were shut and manufacturing activity was lower due to the Lunar New Year holidays.

In February 2013, industrial production had declined 15.5 per cent on-year.

United Overseas Bank expects manufacturing output to come in at an average of 4.6 per cent a month in the next few months.

Economists said the pace of growth in February is not likely to be repeated anytime soon.

Vishnu Varathan, a senior economist at Mizuho Bank, said: “On a durable basis, on a trend basis, whether we will see double-digit industrial production growth… is very unlikely.

“If we take this on a bigger basis, (for example) a three-month on three-month basis, then what really stands out is that ex-biomed, we still have industrial production contracting. That shows that the broader picture is at best a weak recovery, and certainly not one that is going to show a very strong rebound in production this year.”

Economists said that one bright spot is the growth momentum in the electronics sector.

Francis Tan, an economist at United Overseas Bank, said: “We saw strong growth in demand for semiconductors worldwide plus the recovery of economic growth in the G3 countries, particularly in the US… we think growth this year could hit 3 per cent.

“(All this) will eventually boost the consumption demand of the average US consumer. That will help our semiconductor industry, which is 60 per cent of our entire electronics industry.”

Potential downside risks ahead include slowing growth in China, as well as whether companies in Singapore can cope with rising wage costs amid a tight labour market. 

Singapore"s manufacturing output up 12.8% on-year in February