Singapore: Outlook for Industrial Production remains firm

Economist at UOB. Group Barnabas Gan assesses the latest results from the manufacturing sector in Singapore.

Key Quotes

“Singapore’s industrial production expanded 2.1% y/y (+1.0% m/m sa) in April 2021, in line with our call for a 2.3% y/y growth (+2.3% m/m sa). Excluding biomedical manufacturing, industrial production rose 11.1% y/y in the same month. Accounting for April’s performance, Singapore’s industrial production grew 8.4% in the first four months of 2021.”

“Similar to the momentum seen since the start of the year, the surge in global demand for semiconductor chips supported Singapore’s electronic and precision engineering clusters.”

“The output of chemicals accelerated further to clock 14.4% y/y growth in April 2021 (up from +9.5% y/y in March), marking its fastest pace of growth since November 2015.”

“On the back of global growth and a positive external environment, we expect Singapore’s electronic and precision engineering clusters to support the overall manufacturing sector.”

“All-in-all, we keep our industrial production growth outlook of 5.5% in 2021. The risk to our outlook appears to be balanced; upside risks to our outlook will include a quickerthan-expected rollout of the COVID-19 vaccine, resulting in an accelerated recovery back to pre-COVID-19 levels. On the other hand, uncertainties surrounding COVID-19 given the introduction of new virulent variants in other parts of the world may inject downside risks to our outlook.”

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