Singapore: Industrial Manufacturing expanded above estimates in December – UOB

Alvin Liew, Economist at UOB Group, critiques the newest Industrial Prodcution ends in Singapore.

Key Takeaways

“Singapore’s industrial manufacturing (IP) ended 2022 with a shock +3.2% m/m SA enhance in Dec. However, this nonetheless translated right into a contraction of -3.1% y/y in Dec. Excluding the risky biomedical manufacturing, IP really expanded by 6.8% m/m, +0.3% y/y in Dec (from a revised -7.0% m/m, -5.8% y/y in Nov).”

“The Dec IP was dragged by weaker biomedical, chemical compounds, precision engineering and normal manufacturing, negating the continued features in transport and a shock rebound of electronics output. Certainly, electronics staged a shock 4.6% y/y rebound, because of the important thing sub-segments of infocomms & client electronics and pc peripherals & knowledge storage, whereas its most important sub-segment, semiconductors, recorded a a lot smaller -0.3% y/y fall in comparison with -14.0% in Nov. Nonetheless, the semiconductor rebound is probably going momentary due to the continued declining development of Asia-Pacific semiconductor gross sales.”

“IP Outlook – Making an allowance for of the Dec IP contraction, Singapore’s manufacturing sector declined by a smaller -2.6% y/y in 4Q 22 (versus the official estimates of -3.0% y/y from the advance estimates launched in early Jan 2023), however for the total yr, resulting from additional downward revisions in earlier quarters that outweighed the enhancements in 4Q, IP really expanded by a slower tempo of +2.5% in 2022, (versus the official estimate of two.6% made primarily based on advance estimates launched on 3 Jan 2023). So at the same time as we estimate a small upward revision to 4Q GDP to 2.3% y/y (from 2.2%), we anticipate full yr GDP might be revised 0.1ppt decrease to three.7% (from 3.8%). We preserve our forecast for Singapore 2023 manufacturing to contract by 5.4% as a result of faltering outlook for electronics and weaker exterior demand, a view that’s supported by the declining development in PMI and the growing seen cracks in exports’ outlook. With the weaker 2023 manufacturing outlook and barring exterior occasions (akin to escalating struggle in Europe and a deadlier variant of COVID-19), we hold our modest 2023 GDP progress forecast of 0.7% unchanged (versus the official forecast vary of 0.5-2.5%).”