ANN/THE STRAITS TIMES – In August, Singapore’s manufacturing sector experienced its most significant decline in production since November 2019, primarily due to a renewed downturn in the crucial electronics industry.
Factory output plummeted by 12.1 per cent compared to the same month last year, surpassing expectations and marking the 11th consecutive month of contraction in the sector.
Economists survey had anticipated a 3.1 per cent decline, especially following a modest 0.9 per cent contraction in July, which had sparked optimism about the potential commencement of a recovery.
Instead, manufacturing slumped across the board, except for transport engineering, according to data released by the Singapore Economic Development Board yesterday.
Excluding biomedical manufacturing, total output fell 16.6 per cent.
Electronics, which accounts for 45 per cent of Singapore’s total output, was August’s worst performer with production plunging 20 per cent year on year amid weak global demand.
Within electronics, semiconductors saw the biggest fall in output of 23.7 per cent, reversing from growth of 5.1 per cent in July. It was followed by computer peripherals and data storage (-13 per cent ) and electronics modules and components (-5.2 per cent). Overall, electronics output contracted 9.3 per cent year-on-year in the period January to August 2023.
DBS economist Chua Han Teng said that manufacturing recovery in the second half of 2023 is likely to be gradual and fragile given the global economic environment. “The electronics turnaround is still not on firm footing amid external demand challenges and risks from lingering geopolitical tensions that could still disrupt supply chains,” he said.
“But at least the three-month moving average trend shows that the electronics slump has likely bottomed.”
