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Economist at UOB Group Barnabas Gan reviewed the recent data from the industrial and manufacturing sectors in Singapore.

Key Quotes

“Singapore’s industrial production surprised market expectations with a 13.7% y/y (+13.9% m/m sa) surge in August 2020.”

“Coupled with the continued demand for biomedical products, the mix of a relatively low-base print in August 2019 and increased demand for digital solutions and semiconductor equipment were the key reasons for August’s expansion.”

“Notably, biomedical manufacturing expanded 8.4% y/y in August 2020, bucking the contraction pace seen in the previous two months. This was on the back of export demand for medical instruments and higher output of biological products.”

“Nonetheless, low oil prices expected for the rest of 2020 will likely depress the chemicals and transport engineering clusters. Meanwhile, COVID-19-related factors may continue to weigh on the general manufacturing cluster.”

“Given the upside surprise in August’s manufacturing pace, year-to-date manufacturing growth is now at a respectable +3.1% y/y, up from -0.5% y/y in the same period last year. As such, we upgrade our full-year industrial production outlook to average +2.5% in 2020, up from our prior outlook of -2.0%.”