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Economist at UOB Group Barnabas Gan assessed the latest results from the industrial sector in Singapore.

Key Quotes

“Singapore’s industrial production surprised market expectations with a 24.2% y/y (+10.1% m/m sa) surge in September 2020… Excluding biomedical manufacturing, industrial production grew 8.5% y/y.”

“Importantly, the surge in Singapore’s manufacturing momentum seen in September injects upside risks to Singapore’s 3Q20 GDP estimates. Singapore’s implied overall manufacturing cluster’s growth is higher at 10.0% y/y in the third quarter of 2020, materially stronger than the +2.0% growth pencilled in the latest advance estimates for Singapore’s 3Q20 GDP released by MTI. This translates to Singapore’s 3Q20 GDP at -5.6% y/y, up from the advance estimates of -7.0%, assuming no significant revisions to the rest of the key sectors.”

“Given the upside surprise in September’s manufacturing pace, year-to-date manufacturing growth is now at a strong +5.7% y/y, up from -0.6% y/y in the same period last year. As such, we revise our full-year industrial production outlook higher to average +5.5% in 2020, up from our prior outlook of +2.5%. This would improve our full-year Singapore GDP outlook to -5.5%, up from our previous outlook of -6.5%.”