Singapore’s Industrial Production rebounds further – UOB

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

Key Quotes

“Singapore’s industrial production surprised with a positive +4.0% y/y (+3.4% m/m sa) in October 2019. Manufacturing growth has also been revised higher to +0.7% y/y (+4.0% m/m sa) in September 2019, up from a previous +0.1% y/y pace. Accounting for the latest data, manufacturing contracted 0.9% in the first ten months of 2019″.

“The strong uptick in October manufacturing growth reinforces our expectation that Singapore’s industrial production mayhad already bottomed in the third quarter of this year. Growth has been underpinned mainly by volatile components such as pharmaceutical segment (+29.6% y/y) and the medical technology cluster (+13.1% y/y) while the positive contribution from electronics (+0.4%) and precision engineering (+3.4%), was a surprise in October although it is too early to tell if this can be sustained”.

“Given that industrial production has seen positive growth for two consecutive months, we now expect industrial production to contract by a smaller 0.5% in 2019, up from our previous estimate of -3.0%. This would then translate to industrial production growing by a strong 2.1% y/y in the fourth quarter of 2019 and in turn injects upside risk to our full-year GDP growth outlook of 0.5%”.