Singapore: Manufacturing sector under pressure – UOB

Economist Barnabas Gan at UOB Group reviewed the recent figures from the manufacturing sector in Singapore.

Key Quotes

“Singapore’s industrial production contracted 7.4% y/y (-16.5% m/m sa) in May 2020, marking its first contraction in three months.”

“The contraction is attributed to the Circuit Breaker measures which spanned across the entire month of May. Manufacturing momentum fell in the transport engineering cluster (- 40.7%) and general manufacturing cluster (-26.9%). In contrast, the biomedical manufacturing sector (+5.9%) expanded for its fifth straight month. Excluding biomedical manufacturing, Singapore’s industrial production fell 10.4% y/y in May 2020.”

“We keep our industrial production outlook to contract by 2.0% in 2020. COVID-19-led risks amid trade headwinds are formidable drags to Singapore’s overall manufacturing environment.”

“There still remains a high degree of uncertainty over Singapore’s economic prospects. The very nature of the pandemic is fluid, and it could still be more severe and protracted than previously anticipated. Beyond the pandemic, we would also need to account for the renewed geopolitical and trade tensions that may intensify in the coming months.”