Senior Economist at UOB Group Alvin Liew comments on the release of Industrial Production readings in Singapore.
Key Takeaways
“Singapore’s industrial production (IP) extended its weakness with a -11.7% m/m SA, -8.9% y/y decline in Feb, from a revised -0.4% m/m, -3.1% y/y in Jan. The Feb contraction was way worse than Bloomberg’s median forecast of +1.1% m/m, 1.8% y/y but close to our forecast of -10.7% y/y. This was the fifth consecutive month of y/y decline and the worst streak since 2015. Excluding the volatile biomedical manufacturing, IP contracted by a smaller -4.9% y/y in Feb (from 7.1% y/y in Jan).”
“The Feb IP was weighed lower by sharper declines in electronics (-10% y/y from -4.8% in Jan) and chemicals (-14.9% y/y from -13.1% in Jan), while biomedical manufacturing output crashed heavily by -33.6% y/y, solely due to a -59% y/y plunge in pharmaceuticals output, its worst contraction since Jul 2008 (-69.6% y/y).”
“IP Outlook – Even if we excluded the volatility brought by the biomedical manufacturing component, the latest Feb IP print continues to affirm our downbeat manufacturing outlook, and thus, we maintain our forecast for Singapore 2023 manufacturing to contract by 5.4% due to the worsening electronics downcycle and weaker external demand. Cracks in the export outlook also became more pronounced with non-oil domestic exports (NODX) recording consecutive, deeper y/y contractions since Aug 2022. We are likely to see a few more months of y/y declines in NODX before improving in the 2H. We expect full year NODX to contract by -5.5% in 2023. In line with the negative trade and manufacturing projections, we also keep our modest 2023 GDP growth forecast of 0.7% (closer to the lower end of the official forecast range of 0.5-2.5%).”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds steady above 1.0750 ahead of Fedspeak
EUR/USD fluctuates in a relatively tight channel above 1.0750 to start the new week. In the absence of high-tier data releases, investors will scrutinize comments from central bank officials. Later in the week, inflation data from the US could trigger a big reaction.
GBP/USD hovers above 1.2500, focus on UK labor data
GBP/USD struggles to gain traction and fluctuates slightly above 1.2500 in the European session on Monday. Ahead of Tuesday's labor market data from the UK and April inflation report from the US on Wednesday, investors will keep a close eye speeches from central bankers.
Gold price trades on a negative note, eyes on Fedspeak
Gold price trades on a negative note on Monday during the Asian session. The hawkish remarks from the Fed and growing speculation that the Fed might delay its easing plans have boosted the Greenback and dragged the USD-denominated gold lower.
Here’s what needs to happen for The Graph price to revisit $0.422
The Graph price consolidation below a key hurdle shows that it is ready for a volatile move. With GRT retesting the upper limit of its rangebound movement, chances of an upside breakout are high.
Waiting for US inflation to give fresh direction
China continues to struggle with its own demons. Released during the weekend, the data showed that CPI rose, PPI contracted and the aggregate financing in China fell for the first time in history on the back of slower government bond issuance.