Singapore industrial output beats forecasts

> Up 14.6% in September from a year ago, thanks to continued growth in electronics

SINGAPORE: Singapore’s industrial production in September beat expectations and grew for the 14th consecutive month, thanks to continued growth in electronics, data showed yesterday.

Manufacturing output in September rose higher than expected at 14.6% from a year earlier, despite a shock decline in exports in the same month, data from the Singapore Economic Development Board showed. The median forecast in a Reuters survey predicted a 10% expansion.

On a month-on-month and seasonally adjusted basis, industrial production fell less harshly in September at 0.5%, beating analysts’ call for a contraction of 6.7%.

“Manufacturing came stronger than expected. It’s a bit stronger than even the government’s advance estimates as well,” said Nomura economist Brian Tan.

Manufacturing output of electronics grew 33.2% from the year earlier, surprising analysts as this comes after electronics exports saw its first on-year contraction in almost a year.

“It’s quite interesting that there is a big divergence between the two (exports and manufacturing),” Tan said.

“Electronic industrial production numbers are more consistent with regional trends, while the export data seem out of sorts,” he added.

Singapore has been among a number of export-reliant Asian economies to benefit from a general uptick in global demand the past year, enjoying strong sales of its technology products, but analysts expect the city-state’s stellar growth numbers to start moderating.

The sudden decline in exports had prompted some analysts to raise the prospects of a downward revision in the city-state’s third-quarter GDP, which grew faster than expected at 6.3% from the previous three months on an annualised basis.

“All this data is suggesting that manufacturing is still doing well but the real question is what is happening in the broader economy if there are spillovers to the rest of the economy,” Tan said.

Singapore’s central bank held monetary policy steady earlier this month, although analysts say its policy statement suggests a cautious view about growth next year. – Reuters