Singapore: Manufacturing sector remains strong – UOB

Economist at UOB Group Barnabas Gan assesses the latest Industrial Production figures in Singapore.

Key Takeaways

“Singapore’s industrial production rose 16.3% y/y in July 2021 vs June’s advance of 28.0% y/y, and slightly disappointing market estimates for an expansion of 19.9% y/y. This marks the ninth consecutive month that industrial production has seen positive growth… Accounting for the latest data, Singapore’s manufacturing grew 14.7% in the first seven months of 2021.”

“Nonetheless, the growth in industrial production is a testament to Singapore’s strong export backdrop.”

“We continue to expect Singapore’s electronic and precision engineering clusters to support the overall manufacturing sector, on the back of global growth and a positive external environment.”

“We maintain our full-year manufacturing growth outlook at 8.0% in 2021 vs 2020’s expansion of 7.5%. In a nutshell, the relatively stronger export demand from Singapore’s key trading partners seen to-date also suggests that demand in the region has remained buoyant despite COVID-19-related concerns… Overall, we recognise that the low base effects are expected to dissipate further in 2H21, as industrial production rose 11.9% in 2H20, from merely 3.8% in 1H20, thus explaining the expected slowdown to our full-year industrial production growth outlook of 8.0%, from year-to-date’s performance of 14.7%.