Factory output defies predictions, rises 4%
Singapore's manufacturing output defied gloomy predictions for last month as the slumping electronics sector eked out growth and pharmaceutical production jumped.
Factory output increased 4 per cent last month year-on-year, according to figures released by the Economic Development Board yesterday.
Even without biomedical manufacturing, output grew 0.2 per cent. September's slight 0.1 per cent growth was also revised upwards to 0.7 per cent.
Last month's performance was far better than what economists expected, with a Bloomberg poll tipping a fall in output of 1.4 per cent year on year. United Overseas Bank economist Barnabas Gan said: "The strong uptick in October manufacturing growth reinforces our expectation that Singapore's industrial production may have already bottomed in the third quarter of this year."
Growth came on the back of an expansion in biomedical manufacturing, which saw output surge by 24 per cent.
CIMB Private Banking economist Song Seng Wun said: "We are used to seeing the last two to three months of the year having far more volatility in the pharmaceutical sector, perhaps because of plant maintenance and batch production. What we may be seeing now is more continuous production, which allows it to have more stable output and far less swing."
Electronics manufacturers saw growth of 0.4 per cent last month, year-on-year. The infocomm and consumer electronics segment grew the most at 23.8 per cent. Semiconductor output declined 0.9 per cent, but this was much better than the double-digit percentage drops in previous months.
For the first 10 months of this year combined, though, the electronics cluster's output declined 6.5 per cent, compared with the same period last year.
"These sectors were previously dragged by the lacklustre semiconductor-related production and export demand," said Mr Gan. But he said there were signs the contraction of semiconductor sales in the Asia-Pacific was moderating.