Singapore’s January factory output surges
> Forecast-beating increase of 17.9% from a year earlier, led by sharp rise in biomedicals and electronics production
SINGAPORE: Singapore’s industrial production jumped much more than expected in January helped by a surge in biomedical manufacturing and electronics output, data showed yesterday.
Manufacturing output rose 17.9% in January from a year earlier, data from the Singapore Economic Development Board showed. The surge in output comes after its biggest decline in two years in December.
The Lunar New Year, which fell in January last year and shut factories, also meant that last month’s export numbers benefited from extra working days, analysts said.
Despite most analysts were expecting a surge in on-year growth, the rate at which it grew came as a surprise. The median forecast in a Reuters survey predicted an 8.2% expansion from the year-ago period in January.
On a month-on-month and seasonally adjusted basis, industrial production rose 6.7% in January. The median forecast was for an expansion of 4.7%.
This comes after Singapore’s factories posted their biggest onyear output decline in two years in December, contracting a revised 3.4% year-on-year and declining 0.5% on a seasonally adjusted month-on-month basis.
Biomedical manufacturing grew 2.5% in January from a year earlier after suffering a 34.5% contraction in the previous month, contributing to the higher-than-expected on-year overall manufacturing output growth.
“Everyone expected a yearon-year growth, but (on-month growth in biomedical manufacturing) provided that extra bit which allowed for a double digit overall growth number,” Nomura economist Brian Tan told Reuters.
But the volatility of the sector makes it difficult to determine if the recovery is sustainable, Tan said.
Electronics output in January jumped 32.4% from a year earlier compared with the revised 4.4% rise in December.
Singapore along with other trade-reliant economies in Asia has got a boost from an improvement in global demand in 2017, particularly for electronics products and components such as semiconductors.
“Increasingly, a lot of the hardware is going into new technology, like internet of things, driverless cars and cryptocurrency mining which provide a structural boost for industrial demand,” Tan said.