SINGAPORE: Singapore’s industrial production in November rose at the fastest annual pace in more than 2-1/2 years as electronics output jumped, a welcome boost to an economy flirting with recession.
Singapore’s economy has been on the ropes in the last two years as exports fell away amid slow world growth, putting manufacturers under intense pressure as sales and profits took a hit.
So the data from the Singapore Economic Development Board on Friday, showing manufacturing output rose 11.9 percent from a year earlier in November, would be a relief to the beleaguered industry.
The growth was the fastest year-on-year increase since March 2014 and well above the median forecast of 1.6 percent growth in a Reuters survey.
Given the strong output data, the risk of the economy slipping into recession can probably be ruled out, said Francis Tan, an economist for United Overseas Bank. The firmness in industrial production could persist into the first half of 2017, supported by electronics output, Tan said.
“It’s not just a low-base issue… I think there’s a cyclical increase in demand for semiconductors right now.”
On a month-on-month and seasonally adjusted basis, factory output rose 6.1 percent in November, the strongest since January this year. The median forecast was a contraction of 2.0 percent.
Singapore’s government slashed its economic growth and exports forecasts for 2016 after the economy contracted in the third quarter, reinforcing the risk of a recession amid fresh uncertainty around global trade under incoming U.S. President Donald Trump.
The government typically releases its advance estimate for fourth-quarter gross domestic product in early January. Total manufacturing output rose even as marine and offshore engineering production slid 23.6 percent from a year earlier.
