Manufacturing up 17.9% in January compared to same period last year
Robust showing for sector surpasses economists' forecasts
This year is set to be another good one for the manufacturing sector if last month's data is anything to go by.
Output expanded 17.9 per cent from the same month a year earlier, surpassing economists' forecasts of a 7.5 per cent increase. This followed a 3.4 per cent slide in December.
Manufacturing, which makes up a fifth of the economy, has been a key growth driver over the past year, buoyed by strong global demand for electronic gadgets.
This robust showing continued last month: Electronics registered a 32.4 per cent year-on-year surge in output, due largely to the semiconductor, infocomms and consumer electronics and computer peripherals segments.
Precision engineering, which has also benefited from the pickup in electronics demand, grew 24.5 per cent year-on-year last month, according to Economic Development Board figures yesterday.
There was broad growth across other manufacturing segments, including the volatile biomedical segment, which expanded 2.5 per cent.
This came as medical technology output shot up 22.8 per cent on the back of strong export demand for medical devices.
In contrast, pharmaceuticals output slid 3.9 per cent due to lower production of active pharmaceutical ingredients.
If biomedical manufacturing were excluded, overall factory output would have gone up by an even higher 21.6 per cent last month.
Some segments, however, are still suffering.
Marine and offshore engineering, which has been mired in a downturn amid low oil prices, contracted 19.5 per cent last month on the back of a low level of shipbuilding and repair activities.
Economists were cheered by the strong showing last month and said it bodes well for the economy's growth this year.
"This is a synchronised global recovery, which is why manufacturing continues to do well," said DBS economist Irvin Seah.
Last month's better-than-expected data came partly because of a low base a year earlier - Chinese New Year took place in January last year.
Some activities might also have been brought forward from February to January in view of this year's Chinese New Year celebrations, noted CIMB Private Bank economist Song Seng Wun.
But output last month went up significantly too- 6.7 per cent - compared with December, indicating that "the global recovery story is still very much intact", noted Mr Seah.
He added that this also points to better times ahead for manufacturers.
"Manufacturing growth could moderate slightly this year from last year, but it'll still grow at a healthy pace," he said.
UOB economist Francis Tan is also optimistic about the outlook but noted that electronics demand - particularly for semiconductors - could moderate this year.