Industrial production falls below February forecasts on weak electronics output

Industrial production (IP) contracted 1.3% YoY and 7.5% MoM (seasonally adjusted) in February 2025.

Singapore’s industrial production shrank unexpectedly in February, dragged down by sharp declines in electronics and biomedical output, raising concerns over a broader slowdown in the country's manufacturing recovery.

According to UOB’s latest macro note, industrial production (IP) contracted 1.3% YoY and 7.5% MoM (seasonally adjusted) in February 2025—well below market expectations of a 7% increase and UOB’s own forecast of 9.5%.

The weaker showing was led by a sharp reversal in electronics output, which fell 6.4% YoY following strong growth of 15.4% in January, with semiconductors accounting for most of the pullback. Biomedical output also slumped 14.3% YoY, though medical technology production remained resilient.

In a broader context, average output for January and February rose 3.5% YoY, down from 5.8% in Q4 2024, which UOB said “could portend some moderation in the 1Q25’s GDP reading.”

A six-month moving average further confirmed the slowing trend. Electronics output dropped from +15.8% in January to +7.7% in February, whilst overall IP growth declined from +9.2% to +5.7%.

The note attributed this softening to “fatigue from the earlier front-loading of production and exports.”

UOB also pointed to a likely peak in the global electronics cycle. “As noted in our Sep 2024 NODX report, the electronics cycle in both South Korea and Taiwan… has convincingly peaked sometime in 3Q24… Singapore’s electronics NODX growth has similarly peaked in late 4Q24,” the bank said.

Adding to the cautious outlook, UOB warned that escalating trade tensions and global tariff risks could put further pressure on Singapore’s export-driven economy. “Should tariffs and trade tensions continue to escalate, manufacturing activity could be depressed owing to the effects of weaker global demand,” it said.

With the electronics sector cooling and external risks rising, UOB’s note signals a more muted outlook for Singapore’s industrial activity in the months ahead.

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