Aug 26 Singapore’s industrial production in July unexpectedly shrank from a year earlier, as output falls in pharmaceuticals as well as marine and offshore engineering offset a rise in electronics, data showed on Friday.
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Singapore’s total manufacturing performance in July 2016 slipped 3.6% largely due to falloffs in nearly all of industrial clusters. Economists polled by Reuters had expected a rise of 0.9 per cent on-year.
In seasonally adjusted month-on-month terms, manufacturing output declined 4 per cent in July – the third straight month of contraction.
For Citi economist Kit Wei Zheng, “the risks of growth undershooting the already downshifted official expectations may have increased”.
Moreover, production in the highly unpredictable pharmaceuticals segment, however, fell 14.1 percent on-year in July, after a 15.4 percent on- year fall in June.
“I think it’s going to raise the probability of MAS easing in October”, said Wan, who has been forecasting that the central bank would ease at its October policy review by lowering the mid-point of the Singapore dollar NEER’s policy band.
The worst-performing cluster was transport engineering, which posted a 21.8 per cent decline in output.
SINGAPORE-Singapore’s industrial production fell more-than-expected in July amid declines in many subsectors that offset a strong performance by the electronics sector.
Production in this segment has tumbled 29.4 percent in January to July, compared to the year ago period, as a slide in global oil over the past two years has depressed demand for offshore drilling rigs built by Singapore’s rig-building industry.
However, Credit Suisse’s Mr Wan noted that even the strength in the electronics sector is showing some signs of moderation from the previous month’s 19 per cent gain.
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Transport engineering industry continues to drag Singapore’s industrial output. Excluding biomedical manufacturing, it fell 4.8 per cent.
