Singapore’s industrial production unexpectedly rose sharply in April by 13 percent year-on-year, as compared with consensus expectations of a fall of 1 percent. Biomedical manufacturing rose 100.5 percent year-on-year, countering falls in other sectors. Transport engineering dropped 24.1 percent year-on-year, while general manufacturing fell 20.2 percent and chemicals manufacturing was down 6.8 percent. Meanwhile, electronics manufacturing sector recorded an unexpected rise as well, recording a growth of 0.8 percent year-on-year in spite of the circuit-breaker in April.
April is the second straight month that saw a double-digit rise in industrial production, underpinned by the biomedical manufacturing cluster. However, surprising rise in the biomedical manufacturing sector cannot continue indefinitely.
“At some stage, we expect demand in the biomedical segment to mean-revert – potentially before the end of 2020. But with the coronavirus outbreak still far from stable globally and the growing threat of a second wave of infection, the biomedical sector is expected to continue leading overall industrial production into expansion territory”, noted OCBC Bank in a research report.
The resilience of Singaporean industrial production has been extraordinary. Although electronics still greatly dominates Singapore’s manufacturing landscape, the economy’s diversification into the biomedical cluster has cushioned the economic fallout from the coronavirus.
“On a ytd basis, industrial production is up 8.3 percent yoy. The global economic situation remains highly fluid and demand for goods and services may yet take a dive in H2, but the cushion built from the first four months of 2020 has increased the odds that the domestic economy may narrowly escape a full-year contraction in its manufacturing sector”, added OCBC Bank.
