Growth in Singapore factory output slows to 3.4% in March as pharma production falls

SINGAPORE – Growth in Singapore’s manufacturing output slowed in March after a strong performance in February, on the back of a fall in pharmaceutical production.

While growth eased, it marks the sixth straight month of expansion, data from the Economic Development Board (EDB) showed on Tuesday (April 26).

Factory output increased 3.4 per cent last month on a year-on-year basis, down from the revised 17.5 per cent growth in February.

This is higher than the 2 per cent growth forecast by analysts in a Bloomberg poll.Excluding biomedical manufacturing, output grew 9.7 per cent year on year, down from the 16.6 per cent growth in February.

On a seasonally adjusted month-on-month basis, manufacturing output shrank 12.6 per cent in March. Excluding biomedical manufacturing, output fell 6.1 per cent.

UOB said in a note that the robust showing in the manufacturing sector is underpinned by the global trade recovery and the reopening of borders.

Mr Song Seng Wun, economist at CIMB Private Banking, added that the manufacturing numbers highlight the resilience of the consumer.

He expects economic activities to normalise further and said readings of mid-single digit growth are more reflective of these normal times.

Taking a closer look at the different clusters, the key electronics sector saw output grow 14.5 per cent in March compared with a year ago. All segments recorded growth, except for computer peripherals and data storage, which dipped 4.3 per cent.

Within electronics, the semiconductor segment recorded the strongest performance of 17.3 per cent, after the 39 per cent growth in February. 
The sector continues to be supported by sustained demand from 5G markets and data centres amid the global chip shortage, EDB said.

Mr Song said if not for the chip shortage, the sector could have logged in an even stronger performance.

Data from the region showed Asia-Pacific semiconductor sales soaring 41.4 per cent on-year in February, the highest growth since June 2010.

The worst performer was the volatile biomedical manufacturing cluster, whose output fell 26.3 per cent in March, reversing from a 26.1 per cent rise in February.

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