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Economist at UOB Group Barnabas Gan reviews the latest Industrial Production figures in Singapore.

Key Quotes

“Singapore’s industrial production disappointed market estimates with a contraction of 0.9% y/y (-19.0% m/m sa) in October 2020… Excluding biomedical manufacturing, industrial production fell by a slightly more severe 2.7% y/y.”

“Notwithstanding the surprise fall in manufacturing momentum, it is too early to tell if the initial growth spurt seen in 3Q20 has dissipated… Furthermore, the bulk of the decline is still led by COVID-19-related factors which include the travel restrictions, lacklustre demand for construction-associated products, and low oil prices.”

“Being a trade-reliant economy, Singapore’s decline in manufacturing momentum would also be correlated to the unexpected contraction in Singapore’s non-oil domestic exports (NODX) in October 2020.”

“Accounting for the latest manufacturing data, year-to-date manufacturing growth is now at +5.5% y/y, up from -0.1% y/y in the same period last year. Despite the surprise decline in October’s manufacturing momentum, we keep our full-year industrial production growth outlook to average +5.5% in 2020.”