Singapore Factory Output Increased by Surprising 7.6% in November
November saw a surprising surge of 7.6% by Singapore’s factory output, despite the slowdown in the manufacturing sector. However, analysts say that this trend is unlikely to continue. Some analysts are predicting that 2019 will be worse for the manufacturing sector.
Singapore’s factory output performance surprised economists, who were expecting a growth of only about 4.2%. November’s figures also surpassed that of October, which only had a 5.5% increase in growth.
This excludes the volatile biomedical manufacturing sector, whose industry output expanded by 5.3% year on year in November. This data was taken from the Singapore Economic Development Board (EDB). The biomedical cluster sector still remains the manufacturing sector’s biggest growth driver, expanding by 18.5% year on year, which was higher than October’s 13.1%.
Biggest Growth for Pharmaceuticals
Pharmaceuticals posted the biggest growth of 23.9%, with the production of active pharmaceutical ingredients and biological products. Given that the boost is growth was supported mainly by the pharma cluster, it is unlikely that the results will be sustainable because of the high volatility which the pharma cluster is associated with.
The electronics industry on the other hand, shrank in September and October with a poor performance streak of only 11.2% growth. Semiconductors grew by a sharp16.5%, while infocomms and consumer electronics posted a 12.6% growth. Electronic modules and component segments posted a 3% growth. The unexpected boost to the economics sector could be attributed to the temporary easing of global trade tensions, especially between the United States and China.
The Practice of Frontloading
In the ongoing trade war between the two countries, frontloading is a practice which both manufacturers accelerate the orders of production and shipment. This is done to avoid tariffs, and when such activities eventually subside, the better than expected manufacturing growth trend is unlikely to continue into next year.
The chemicals industry also posted a two-month decline, growing only at a rate of 3.4% year on year in November. The transport engineering industry on the other hand, grew by 11.3% with all segments recording a positive growth rate. Marine and offshore engineering saw the biggest boost in growth, expanding by 26.6%, while general manufacturing shrank by 0.8%. Precision engineering also saw a decline in output by 8.2%.