March factory output surprises with 10.2% rise
Factories kept powering ahead last month as the improving global economy lifted trade and export demand.
Economists credit the resurgent manufacturing sector for helping the economy kick off the year on a strong footing, so much so that growth numbers for the first quarter will likely be revised upwards.
Factory output jumped 10.2 per cent last month over the same month last year, stronger than the 5.8 per cent expected. Manufacturing is benefiting from a more positive global outlook and strong demand for electronics.
But performance across the sector has been uneven, with some segments surging and others flagging. Last month's robust showing was again attributed mainly to the electronics cluster, where output swelled 37.7 per cent, driven largely by the semiconductors segment.
The strong run in electronics has been propelled principally by consumer demand, said DBS senior economist Irvin Seah.
Other clusters also fared well. Precision engineering expanded by 12.8 per cent, while chemicals output rose 3.5 per cent from a year earlier.
This made up for declines elsewhere, including the transport engineering cluster, which shrank 15.6 per cent as the marine and offshore engineering segment remained weak.
Even if the pace of electronics output growth slows in the coming months, manufacturing is still likely to be the key growth engine this year, said OCBC Bank's head of treasury research and strategy, Ms Selena Ling.
Manufacturing output expanded 8 per cent in the first quarter, after taking into account a downward revision in February's data, she added.
This is up from an earlier estimate of 6.6 per cent and should similarly boost overall first-quarter economic growth.
The manufacturing pick-up has been accompanied by strong export growth, with non-oil domestic exports rising 16.5 per cent year-on-year last month, the fifth month of expansion.