Factory performance shows strong gains, with electronics and biomedical sectors driving the growth
Singapore’s factory output grew by 3.8% year-on-year in February, marking an extension of the growth seen in January, which was revised to a 0.6% increase. The result surpassed the expectations of private-sector economists, who had predicted a modest 0.5% rise in a Bloomberg poll.
When excluding the volatile biomedical manufacturing sector, output grew by 1.4% year-on-year, slightly easing from January’s 4.7% increase. The performance was led by the rebound in the electronics and biomedical clusters, both showing strong growth in key areas.
Factory output in the electronics sector rose by 2.6% year-on-year, reversing the 4.7% decline observed in January. Notably, infocommunications and consumer electronics saw the most significant gains, up by 30.9%, while semiconductors grew by 2.1%, and other electronic modules and components saw a 0.3% increase. However, the computer peripherals and data storage segment contracted by 10.7%.
Analysts like OCBC chief economist Selena Ling pointed out that February’s performance exceeded expectations, marking the second consecutive month of expansion. She emphasized that the electronics sector, particularly semiconductors, is crucial to sustaining this growth, with the global demand outlook being a key factor.
Moody’s Analytics economist Denise Cheok also expects the electronics cluster to pick up momentum in the second half of 2024, driven by a recovery in global demand. Non-oil domestic exports of integrated circuits, a major component of the electronics sector, saw growth for the first time in 18 months in February, signaling a positive trend for the industry.
