Singapore factory output growth eases to 6.8% in July; electronics up 11.2%

Factory output in Singapore grew by 6.8% year-on-year in July, a slight slowdown from the revised 7.5% increase in June, according to data released by the Economic Development Board on August 26. This growth rate matched estimates from private-sector economists who had previously forecast a 6.8% expansion in a Bloomberg poll. When excluding the volatile biomedical manufacturing sector, output increased by 8% year-on-year in July, a slowdown from June's revised 9.9% growth.

On a seasonally adjusted monthly basis, output rose by 2.3% in July, in contrast to June's revised 7% contraction. Within the manufacturing sector, all clusters reported output growth on a year-on-year basis in July, except for the biomedical manufacturing and chemicals clusters. The electronics cluster, however, showed the second-highest growth among all manufacturing clusters, with output increasing by 11.2% in July, down from June's 21.1% growth.

This growth was driven by a surge in infocomm and consumer electronics (51.7%), followed by semiconductors (8%), due to sustained demand for artificial intelligence-related products.

The precision engineering cluster recorded the highest year-on-year rise in July at 17.7%. This growth was primarily attributed to higher production of semiconductor equipment, with machinery and systems expanding by 18.2%, and other electronic modules and components growing by 2.5%, as well as computer peripherals and data storage increasing by 0.8%.

Within the transport engineering cluster, output grew by 10.8%, driven by gains in the land (28.5%) and aerospace (15.8%) segments. The marine and offshore engineering segment, however, contracted by 2.1%, primarily due to reduced production of oil and gas field equipment.

General manufacturing expanded by 4.9%, led by the food, beverages, and tobacco segment (10.4%), which produced more beverage and dairy products, and printing (2.7%). These gains were offset by declines in miscellaneous industries (-5.9%) due to lower production of structural metal products and furniture. The chemicals cluster experienced the steepest decline among all clusters, contracting by 10.6%, with the petrochemicals (-48.7%) and petroleum (-7%) segments suffering the most due to plant maintenance, softer demand, and feedstock supply disruptions.

The biomedical manufacturing sector declined by 5.3% as both pharmaceutical (-14.3%) and medical technology (-2.2%) sectors contracted.