Singaporean industrial production rebounds in January, likely to normalize slightly in months ahead

Industrial production growth of Singapore recovered in the month of January. On a year-on-year basis, the industrial output grew 17.9 percent, coming in above market expectations. On a sequential basis, it rose 6.7 percent in January. However, it is partially attributed to a low base effect as CNY was in January 2017 with some spillover into February 2017. The data for January 2018 marked the strongest on-year performance since August 2017 and reversed four straight months of declines. Stripping biomedical, manufacturing output rose at an even stronger rate of 21.6 percent year-on-year in January 2018.

All the manufacturing clusters recorded growth, led by electronics, which grew 32.4, followed by precision engineering, chemicals, general manufacturing, biomedical manufacturing and even transport engineering.

The sharp rise in January might be relatively short-lived as the data is expected to normalize slightly in the coming months as the base effects get more challenging, noted Selena Ling, Head of Treasury Research & Strategy, OCBC Bank.

“We tip manufacturing growth to average 5.9 percent yoy for 1Q18, bringing GDP growth to around the 3 percent yoy handle”, added Selena Ling.

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