SINGAPORE: The country’s total factory output showed a 2.5 per cent decrease year-on-year in December, according to data from the Economic Development Board (EDB) published on Friday (Jan 26).
The decline is in large part due to significant losses in the biomedical sector – should the currently volatile sector be excluded, factory output would actually show a 0.5 per cent growth.
Biomedical manufacturing, which had seen a 2.8 per cent decrease in November, fell by 23.9 per cent year on year last month. In particular, pharmaceuticals output decreased by 45 per cent because of a lower production of biological products. The sector showed a 9.6 per cent decrease overall for 2023.
Economists predicted a one per cent increase overall late last year, which was later revised to zero growth.
Manufacturing output shrank by 4.3 per cent for 2023. Without the biomedical sector, this contraction goes down to 3.6 per cent.
“On a seasonally adjusted month-on-month basis, manufacturing output decreased 1.7 per cent,” said the EDB, which is under the purview of the Ministry of Trade and Industry.
The electronics cluster has been one of the bright spots, however, growing by 6.3 per cent in December 2023 compared to the year before, and showing an increase from November’s 5.1 per cent uptick. Even more impressive is the 17.7 per cent growth in the semiconductors segment, due in part to higher demand in certain end markets including smartphones.
However, the electronics cluster decreased last year by 3.2 per cent when compared with 2022.
The data shows that the country’s manufacturing recovery has been uneven thus far, and is likely to continue this way.
“While the worst of Singapore’s factory slump is already behind us, we expect the manufacturing recovery to be gradual and fragile in 2024,” DBS economist Chua Han Teng is quoted in The Business Times as saying.
“The global economic environment remains uncertain, due to high interest rates in advanced economies, the bumpy economic recovery in China, as well as lingering geopolitical tensions that could still disrupt supply chains – the diversion of cargo ships in the Red Sea since December, is a reminder of unexpected events that could hinder the trade and manufacturing recovery,” he told The Straits Times.
General manufacturing fell by 15.9 per cent, as all segments showed declines in output. This is in contrast to the growth manufacturing had seen in November, when a one per cent year-on-year increase occurred. /TISG