Economist at UOB Group Barnabas Gan assesses the latest results from the Industrial Production in Singapore.

Key Takeaways

“Industrial production expanded 6.2% y/y (+2.2% m/m sa) in Apr 2022, beating market expectations for a softer growth of 4.3% y/y (although the sequential increase is weaker than the projected +5.0% m/m sa). Excluding biomedical manufacturing, industrial production rose 7.7% y/y.”

“The global trade recovery and Asia’s gradual reopening of borders aided overall manufacturing momentum. This is led especially by the transport engineering cluster which expanded 17.2% y/y in Apr 2022, on the back of higher production of aircraft parts, maintenance & repair demand from commercial airlines. Strong demand from the semiconductor segment also underpinned the electronics and precision engineering industries.”

“On the back of Apr’s manufacturing print and Mar’s upward revision (Mar 2022: +5.1% y/y), Singapore’s industrial production rose 7.3% in the first four months of 2022. Despite the uptick year-to-date, it remains softer compared to the 9.2% growth print seen in the same period last year. Moreover, relatively higher base levels will dampen the IP growth numbers for the rest of this year, considering that industrial production expanded by double digit growth rates between May – Dec 2021 (except for Sep 2021).”

“In all, our outlook is for full-year manufacturing to grow by an average of 4.0% in 2022. This suggests that despite the high-base growth rate seen in 2021, global trade activity is expected to stay buoyant in the year ahead.”