Senior Economist Alvin Liew at UOB Group assesses the latest results from Industrial Production in Singapore.

Key Takeaways

“Singapore’s industrial production (IP) contracted more than forecast in Apr, affirming the weak manufacturing outlook. IP contracted by -1.9% m/m, -6.9% y/y in Apr, worse than Bloomberg’s median forecast of +0.1% m/m, -4.5% y/y and our forecasts of -0.7% m/m SA, -3.9% y/y. Meanwhile, the March IP was revised higher to 9.7% m/m, -3.8% y/y (versus the prelim estimates of 9.3% m/m SA, -4.2% y/y in Mar.  This was the seventh consecutive month of y/y decline and the worst streak since 2015 (11 months of y/y declines). Excluding the volatile biomedical manufacturing, IP actually rose by 2.2% m/m (from +5.4% m/m in Mar) which translated to a smaller contraction of -6.1% y/y in Apr (from -5.6% y/y in Mar).”

“IP Outlook – While we are heartened by the continued growth in the transport engineering components of aerospace and marine & offshore, the latest Apr IP print continues to affirm our downbeat manufacturing outlook due to the worsening electronics downcycle and weaker external demand. We maintain our forecast for Singapore 2023 manufacturing to contract by 5.4%.’