Senior Economist Alvin Liew and Associate Economist Jester Koh at UOB Group assess the recently published Industrial Production readings in Singapore.
Key Takeaways
Singapore’s Aug IP contracted 12.1% y/y, the weakest y/y reading since Nov 2019 while the contraction in Jul’s IP was revised slightly deeper to -1.1% y/y (prior: -0.9%). The 12.1% y/y contraction in Aug IP was significantly worse than Bloomberg’s consensus of -3.1% and even below our more bearish forecast of 6.5%. On a seasonally adjusted basis, IP contracted 10.5% m/m SA in Aug while the previous month’s expansion was revised to a shallower 3.7% (from 4.1%). Likewise, the Aug m/m SA reading was much weaker than Bloomberg consensus of -1.5% m/m SA and our estimate of -4.4%. In the first 8 months of 2023, IP contracted by 6.6% y/y.
IP Outlook – The latest IP reading reaffirms that the electronics downcycle and more broadly, the trade downcycle has yet to find a bottom. With external demand likely to weaken further amidst an elevated interest rate environment and tighter global financial conditions, we expect the weakness in manufacturing activity to persist for the rest of the year and any signs of recovery will only likely to emerge earliest in 1Q24, in our view. Consequently, we downgrade our 2023 full-year industrial production forecast to -7.0% from our earlier projection of -5.4%. Concurrently, we cut our full year 2023 GDP forecast to 0.4% (prev: 0.7%), slightly below the lower end of the MTI’s official projection of 0.5-1.5% and maintain our 2024 growth forecast at 3.0%, albeit with risks to the downside. We expect Singapore’s 3Q23 GDP advanced estimate reading to be released in the week of 09-13 Oct, concurrently with the Oct Monetary Policy Statement, likely on 13 Oct (Fri).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
Gold moves to record highs past $3,340 Premium
Gold now gathers extra steam and advances beyond the $3,340 mark per troy ounce on Wednesday, hitting all-time highs amid ongoing worries over escalating US-China trade tensions, a weaker US Dollar and lack of news from Powell's speech.
Australian Dollar receives support from improved global risk mood, US Retail Sales eyed
The Australian Dollar extends its winning streak against the US Dollar for a sixth consecutive session on Wednesday, with the AUD/USD pair holding firm after the release of Australia’s Westpac Leading Index. The index’s six-month annualised growth rate eased to 0.6% in March from 0.9% in February.
EUR/USD remains in a consolidative range below 1.1400
EUR/USD navigates the latter part of Wednesday’s session with marked gains, although another test of the 1.1400 level remained elusive. The strong bounce in spot came on the back of a marked move lower in the US Dollar, which remained apathetic following the neutral stance from Chair Powell.
Bitcoin stabilizes around $83,000 as China opens trade talks with President Trump’s administration
Bitcoin price stabilizes around $83,500 on Wednesday after facing multiple rejections around the 200-day EMA. Bloomberg reports that China is open to trade talks with President Trump’s administration.
Future-proofing portfolios: A playbook for tariff and recession risks
It does seem like we will be talking tariffs for a while. And if tariffs stay — in some shape or form — even after negotiations, we’ll likely be talking about recession too. Higher input costs, persistent inflation, and tighter monetary policy are already weighing on global growth.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.