June's industrial output of 13.1% exceeds forecast

This article is more than 12 months old

Led by a resurgent electronics sector, S'pore's industrial output shoots up

Industrial output in June easily beat forecasts, with a resurgent electronics sector leading the charge. Growth shot up 13.1 per cent over the same month last year - the biggest year-on-year rise this year and 11th consecutive month of increase.

June's performance exceeded forecasts of around 8.5 per cent and tripled the revised 4.4 per cent growth in May.

Most economists expect second-quarter GDP growth to be upgraded but are divided on manufacturing's prospects.

Some believe the recovery is broad-based and may point to the economy's expansion in this half of the year, while others warned that growth among various sectors remains uneven.

Electronics jumped 25.5 per cent in June over the same month last year, with semiconductors surging by 37.4 per cent. Precision engineering grew 5.3 per cent year-on-year in June.

OCBC Bank economist Selena Ling and United Overseas Bank economist Francis Tan see continued momentum in electronics, but at a slower pace.

Mr Tan said semiconductor growth could slow in this half if capital expenditure growth in China slows.

The biomedical sector rebounded after five months of contraction with growth of 18.3 per cent in June compared with a year earlier, led by gains in pharmaceuticals and medical technology.

DBS Bank senior economist Irvin Seah said this sector was due for a rebound "after two months of shutdown in some of the key plants for routine maintenance".

Chemicals also grew faster, boosted by petrochemicals, while general manufacturing remained the weakest sector.

Transport engineering finally broke a 36-month period of contraction, growing 4.6 per cent year-on-year in June, as aerospace and land transport segments expanded.

But marine and offshore engineering remained weak, falling 11.8 per cent.

Association of Small and Medium Enterprises president Kurt Wee warned that the recovery is not broad-based as oil and gas and construction and retail remain in the doldrums.

Singapore Business Federation chief executive Ho Meng Kit said: "Retailers aren't moving fast enough into new ways of retailing through e-commerce or sharing platforms like Alibaba's."