Singapore’s Manufacturing Sector Shows Resilience in September
In a positive sign for Singapore’s economy, the total manufacturing output in the country increased for the third consecutive month in September. While the key electronics industry experienced a slower pace of growth, economists remain optimistic about the overall trajectory of Singapore’s manufacturing sector.
Key Highlights:
- Total manufacturing output grew by 9.8% year-on-year, a slight decrease from the 22% jump in August.
- Factory output, excluding biomedical manufacturing, rose by 4.5%.
- On a seasonally adjusted month-on-month basis, output remained relatively stable compared to August, with a 7.6% decline excluding biomedical manufacturing.
- UOB associate economist Jester Koh described September’s growth as "remarkably resilient," suggesting a potential upward revision to Singapore’s GDP for the third quarter.
- Maybank analysts Chua Hak Bin and Brian Lee believe that despite the slower output growth in the electronics industry, the recovery in this sector is likely to continue.
Potential Risks to Singapore’s Manufacturing Sector:
While the outlook for Singapore’s manufacturing industry appears positive, analysts have identified several risks that could impact its growth trajectory. These risks include:
- Tariff barriers and a potential escalation of the US-China trade war.
- Geopolitical conflicts in the Middle East.
- A slowdown in the United States economy.
Expert Insights:
DBS economist Chua Han Teng highlighted the potential impact of ongoing geopolitical conflicts and protectionist measures on Singapore’s manufacturing and trade growth. He noted that these factors could disrupt global supply chains and lead to a more fragmented trade landscape.
Despite the challenges, Mr. Chua remains optimistic about the global semiconductor industry’s recovery, which is expected to benefit Singapore’s electronics firms. He emphasized the opportunities presented by the replacement of smartphones and PCs, as well as the increasing adoption of artificial intelligence (AI) applications.
External demand for Singapore’s electronics products also remains strong, with new export orders showing growth for the 10th consecutive month through September. This positive trend indicates continued support for Singapore’s manufacturing sector.
In conclusion, Singapore’s manufacturing sector has shown resilience in the face of economic and geopolitical challenges. While risks remain, experts are optimistic about the industry’s future growth prospects, particularly in the electronics sector. Stay tuned for further updates on Singapore’s manufacturing landscape.