SG manufacturing output down 3.4% YoY in September

Precision engineering, transport engineering and chemicals contributed the most. 

Singapore's manufacturing output dipped 3.4% year-on-year (YoY) in September 2021, the Economic Development Board of Singapore announced.

When compared on a seasonally adjusted month-on-month basis, output decreased by 2.8%. Excluding biomedical manufacturing, output fell by 5.1%.

The top three clusters to contribute to this performance were precision engineering, transport engineering, and chemicals.

Precision engineering increased 30.2% YoY, with this being attributed to the higher output of semiconductor and industrial process equipment. The machinery and systems segment grew 38.4%, whilst the precision modules and components grew by 13.5% with the increased production of optical products, plastic, and metal precision components. 

Transport engineering, meanwhile, saw an expansion by 12.9% in the month. This was due to the rise of aerospace and marine and offshore engineering by 21.7% and 9.9%, respectively. Activity in aerospace firms and shipyards increased compared to last year. All in all, the cluster grew 5.6% from January to September 2021 when compared to the same period last year.

Chemicals had 12.4% YoY growth, with almost all segments seeing output growth, aside from the specialities segment with a decline of 1.5%. Petroleum and petrochemicals segments saw 26.1% and 18.6% YoY growth when compared to last year. The other chemicals segment also experienced a 9.9% growth due to the higher production of fragrances.

The biomedical manufacturing segment saw the most contraction at 35.9%. This was due to the pharmaceuticals segment’s crash of 40.2% YoY due to a different mix of active pharmaceutical ingredients being produced a year ago. The medical technology segment saw a 2.4% spike due to sustained export demand for medical devices. Compared to the same period a year ago on a year-to-date basis, the biomedical manufacturing cluster grew by 1.4%.

Going forward, a research by OCBC pointed to China's growth slowdown and its ongoing power crush as a potential disruption. This, accompanied by global supply chain disruptions and regulatory policy clampdown could damped regional demand-supply dynamics adversely.

UOB, meanwhile, expects the country's electronics and precision engineering clusters to continue supporting the manufacturing sector. This is on the back of global growth and a positive external environment.