Singapore factory output jumps in August, driven by sustained AI demand
All clusters, except chemicals, recorded output growth on a year-on-year basis in August 2026.
In August, Singapore's manufacturing output surged by 15.4% compared to the previous year, according to the Economic Development Board's data released on September 28. However, this growth figure fell short of the 17.1% growth forecast by economists in a Bloomberg poll. The expansion was observed across all manufacturing clusters, except for the chemicals industry, which experienced a decline of 12.7% due to factors such as plant maintenance and reduced demand for petroleum and petrochemical products.
The precision engineering cluster demonstrated the most significant growth, with output rising 33.9% year on year. This increase was primarily driven by the semiconductor equipment sector within the machinery and systems segment. Notably, the precision modules and components segment experienced a surge in production of dies, moulds, tools, jigs, fixtures, and precision components for the electronics industry.
The electronics industry itself witnessed a 28.5% year-on-year increase, fueled by robust production of servers, semiconductors, and data storage products, driven by the strong demand for artificial intelligence-related products. Within the electronics cluster, semiconductor output surged 26.1%, while infocomm and consumer electronics expanded by 66.3%, and computer peripherals and data storage grew by 20.4%. However, other electronic modules and components saw a decline of 6%.
Transport engineering also experienced growth, expanding by 9.5%, primarily due to higher production in the land and aerospace segments. In particular, the aerospace segment recorded increased output of aircraft parts and benefited from sustained maintenance, repair, and overhaul jobs from commercial airlines. General manufacturing output increased by 1.5%, supported by higher production of beverage products, commercial printing, and metal doors and windows.
The biomedical manufacturing sector saw a modest 0.4% year-on-year growth, driven by stronger export demand for medical devices, though this was tempered by a decline in the pharmaceuticals sector due to a different mix of active pharmaceutical ingredients being produced.
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