Electronics and pharmaceuticals drag September industrial output growth to 3.4%

Figures fell short of the 7.8% consensus forecast.

Industrial production (IP) growth slowed more than expected to 3.4% year-on-year in September from 15.4% in August, dragged down by weaker electronics and pharmaceuticals output, according to a report by Nomura.

The figure fell short of the consensus forecast of 7.8% and Nomura’s own forecast of 9.6%.

Despite the slowdown, IP growth for the third quarter reached 8.5%, down from 13.2% in the second quarter but above the 7.5% used in the government’s advance GDP estimate.

Nomura said this implies third-quarter GDP growth may be revised up to 5.6% from the advance estimate of 5.4%, lifting the average for the first three quarters to 6.1% from 6%.

Electronics output growth fell sharply to 5.7% in September from 28.3% in August, even as electronics non-oil domestic exports posted triple-digit growth amidst the ongoing global tech upcycle.

The precision engineering cluster held up, growing 31% compared with 33% in August, supported by semiconductor equipment production.

Pharmaceuticals output was the bigger drag, contracting 65.9% from a 4% decline in August due to unfavourable base effects. Chemicals output improved to a 4.6% contraction from 12.8%.

Within the segment, petroleum output grew 4.6% after falling 11.8%, whilst petrochemicals production fell 24.3%, an improvement from a 50% decline, as softer demand and feedstock supply disruptions continued to weigh on the sector.

Nomura maintained its 2026 GDP growth forecast of 5.7%, above the consensus of 5.3% and the official forecast range of 4.5% to 5.5%.

Upside risks remain as Singapore’s multiple growth engines stay broadly intact. Nomura added that the continued rise in the manufacturing PMI points to stronger IP growth in the coming months, alongside new production capacity coming online.

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