Factory output accelerates to 15.4% in August, undershooting estimates

In August, Singapore's factory output surged by 15.4% year-on-year, surpassing the July growth rate of 6.9% but falling short of the estimated 18.3% expansion, according to data from the Economic Development Board (EDB). Excluding the volatile biomedical manufacturing sector, output increased by 17% on the year, continuing the 8.2% growth from July.

However, a seasonally adjusted monthly analysis revealed a 0.5% decline in factory output, contrasting with the 2.3% gain in July. The majority of manufacturing clusters experienced year-over-year increases, with precision engineering witnessing the most significant surge at 33.9% year-over-year, driven by higher production of semiconductor equipment in the machinery and systems segment.

The electronics cluster also expanded by 28.5% year-over-year, fueled by robust demand for servers, semiconductors, and data storage products in response to growing artificial intelligence applications. Meanwhile, transport engineering grew by 9.5%, led by the land and aerospace segments, while general manufacturing industries expanded by 1.5%, supported by increased production of beverage products, commercial printing, and metal doors and windows.

Notably, the biomedical manufacturing sector saw a modest 0.4% growth, driven by higher output of medical devices in the medical technology segment; nonetheless, this was tempered by a decline in the pharmaceuticals segment due to changing active pharmaceutical ingredient compositions. Conversely, chemicals manufacturing saw a substantial 12.7% decline, primarily due to the petroleum and petrochemical segments, which faced challenges such as plant maintenance and disruptions in feedstock supply.

Despite the overall decline, the specialty segment registered output growth, driven by higher production of industrial gases and food additives.