Singaporean manufacturers have benefited from the strengthening global economy, which is increasing demand for exports.
Factory output expanded 5.3 per cent year on year in November, below analysts’ expectations of a 8.1 per cent, largely because of a slump in the erratic biomedical manufacturing sector.
But other sectors saw strong growth, including electronics manufacturing, which has been central to 2017’s growth.
If biomedical manufacturing was removed from the figures, factory output would have risen by 13.9 per cent.
The fourth quarter is expected to see growth of 2.7 per cent compared with the same period last year, according to a Reuters survey of economists.
“While we expect some moderation of momentum [in Q4], growth likely remains constructive, supported by manufacturing,” said Jeff Ng of Continuum Economics.
Manufacturing, which makes up 20 per cent of the city-state’s GDP, has been one of the best performers this year, thanks largely to rising global demand for semiconductors and related equipment.
Electronics output for November rose year on year by 27.6 per cent as semiconductors, infocomms and consumer electronics saw strong growth.
Singapore’s trade-reliant economy enjoyed a boost this year as electronics output rose 37.1 per cent from January to November, compared with the same period in 2016.
In November, the authorities revised up its GDP growth forecast range for this year from 3.0 per cent to 3.5 per cent: the fastest growth since 2014, when GDP rose by nearly 3.6 per cent.
Precision engineering, which has also benefited from the rising demand for electronics, grew 19.9 per cent year on year last month, Singapore’s Economic Development Board reported.
Growth appears to be strong enough for the Monetary Authority of Singapore to look at tightening monetary conditions at its policy review in April, said Hirofumi Suzuki of Sumitomo Mitsui Banking Corporation.
“Other countries are gradually tightening their monetary policies, and it’s not as if Singapore’s economic conditions are particularly weak,” Mitsui said.
Chemicals output also increased 7.5 per cent with all segments recording growth but biomedical manufacturing saw output fall 23.3 per cent year on year. Pharmaceuticals output declined by 31.1 per cent due to a different product mix being produced, bringing down the overall sector.
Transport engineering saw output decline 8.3 per cent year on year in November, with land transport and marine and offshore engineering all declining.
The government expects the economy to grow 1.5 per cent to 3.5 per cent next year.
The prospects for Singapore’s exports in 2018 are positive. Picture credit: Flickr
