S’pore factory output falls 0.8% in October, snapping year of growth as pharma slumps

SINGAPORE – Singapore’s manufacturing output shrank for the first time in a year on a slump in pharmaceuticals production and continued weakness in the linchpin electronics sector.

Output in October dropped 0.8 per cent year on year, according to data released by the Economic Development Board (EDB) on Friday. Excluding volatile biomedical manufacturing production, output rose by 1.9 per cent.

Overall production slightly exceeded the 0.9 per cent contraction forecast by analysts in a Bloomberg poll. The last time factory output shrank was in September 2021, when it contracted 2 per cent, likewise due to pharmaceuticals.

The electronics sector saw output drop 0.7 per cent in October, smaller than the 5.7 per cent decline in September and 6.9 per cent fall in August.

The industry, which is key to Singapore’s economic growth as it accounts for 40 per cent of the export-driven manufacturing sector, is facing a slump in global demand amid macroeconomic headwinds.

Singapore’s semiconductor output, which accounts for 80 per cent of electronics manufacturing, grew 1.2 per cent in October, reversing a 7.7 per cent decline in September. Singapore supplies 11 per cent of the world’s semiconductors and 20 per cent of chipmaking equipment.

Output for the other electronic modules and components tumbled 23.2 per cent, while computer peripherals and data storage fell 12.7 per cent. But the infocomms and consumer electronics segment, expanded by 4.1 per cent.

Biomedical manufacturing output also fell, by 14.5 per cent, in October. It was dragged down by the pharmaceuticals segment that shrunk 27.1 per cent due to a different mix of active ingredients being produced.

This came even as the medical technology segment expanded 4.2 per cent with higher export demand for medical devices.

Chemicals output also declined in October, falling 9.7 per cent. The petroleum segment grew 14.6 per cent due to higher demand for jet fuel as global air travel restrictions ease. But the sector was weighed down by the petrochemicals segment, which slid 12 per cent due to weak market demand and plant maintenance shutdowns.

The specialties segment likewise fell 12.2 per cent due to lower production of mineral oil and food additives, while the other chemicals segment saw a 17 per cent drop as less fragrances were made.

Precision engineering was a bright spot, with output jumping 18.6 per cent, buoyed by a 24.7 per cent expansion in machinery and systems production due to higher output of semiconductor foundry equipment. The precision modules and components segment also grew – by 5.5 per cent – on the back of higher production of optical products.

The transport engineering industry saw growth of 6.3 per cent in October, cooling from the 38.8 per cent expansion in the previous month. Its aerospace segment expanded 19.7 per cent, supported by with higher demand for aircraft parts from the United States and more maintenance, repair and overhaul jobs from commercial airlines.

However, marine and offshore engineering output dipped 3.2 per cent and the land segment shrunk 11.8 per cent.

General manufacturing output was unchanged year on year, with the food, beverage, tobacco and printing segments recording an increase in output. However, the miscellaneous industries segment declined 11.5 per cent due to lower production of batteries and structural metal products.

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