SINGAPORE – Singapore’s manufacturing output expanded for a fifth straight month in November as production surged in the key electronics industry, which likely got a boost from front-loading ahead of possible US tariff hikes.
Analysts were cautious about the uncertain outlook for manufacturing in 2025, given the incoming Trump administration’s more protectionist stance and heightened geopolitical tensions.
Total factory output climbed 8.5 per cent year on year, after a modest 1.2 per cent rise in October. The expansion, however, fell short of the 9.7 per cent growth forecast by economists in a Bloomberg poll.
Excluding the more volatile biomedical industry, output increased 13 per cent, data from the Economic Development Board on Dec 26 showed.
“Export demand for electronics remains robust, with the global semiconductor industry still in an upcycle,” said Ms Yen Nee Lee, senior country risk analyst at BMI, ahead of the release.
She added that there are signs that exporters in China are “front-loading” shipments to the US – delivering as much inventory as possible in advance – ahead of President-elect Donald Trump’s inauguration on Jan 20.
The move “should contribute to higher demand for intermediate goods from Singapore”, she said.
Mr Jester Koh, associate economist at UOB, noted the ongoing upturn in the electronics cycle, with tailwinds from “some front-loading of exports and attendant ramp-up in production ahead of Trump’s proposed tariffs on US imports”.
This could help support growth momentum in trade-related sectors, including manufacturing, into early 2025, he said.
The electronics industry, which accounts for nearly half of Singapore’s manufacturing output, saw an increase of 26.2 per cent year on year, higher than the 4.3 per cent rise in October.
Within the cluster, semiconductor output surged 28.8 per cent, while computer peripherals and data storage expanded 23.6 per cent, and infocomms and consumer electronics added 8.7 per cent.
Other electronic modules and components fell 6.5 per cent.
Precision engineering output inched 0.6 per cent higher year on year. Within the cluster, the machinery and systems segment expanded 4.3 per cent, driven by increased production in front-end semiconductor equipment.
However, the precision modules and components segment fell 5.2 per cent, mostly led by lower output of optical instruments and metal precision components.
Mr Koh said the manufacturing outlook remains cloudy beyond early 2025.
“Downside risks could emanate from further protectionist measures under Trump’s ‘America First’ policy, elevated geopolitical tensions, a possible peak in the electronics cycle and uncertainty over the pace of monetary easing by major central banks,” he said.
Barclays economist Brian Tan also sees a possible slowdown ahead in chip manufacturing.
“We are seeing around Asia – not just in Singapore – signs of fatigue in the semiconductor cycle. If this falters, GDP (gross domestic product) growth in 2025 could easily disappoint,” Mr Tan said.
He added: “We expect the uncertainty over US trade policy to start weighing on economic activity regardless of when tariffs are announced. Should US tariffs materialise, their impact on ultra-open Singapore is likely to be significant.”
Beyond electronics and the related precision engineering cluster, Singapore’s other manufacturing industries fared worse in November.
Biomedical manufacturing output fell 21.2 per cent from a year ago.
Within the cluster, the pharmaceuticals segment declined 37.1 per cent on account of a different mix of active pharmaceutical ingredients being produced, compared with a year ago. The medical technology segment grew 5.8 per cent, thanks to continued export demand for medical devices.
General manufacturing output dropped 2.6 per cent, with all segments reporting declines.
Within the cluster, the printing and food, beverages and tobacco segments declined 1.4 per cent and 1.7 per cent, respectively, while the miscellaneous industries segment was down 3.7 per cent, due to decreased production of structural metal products and paperboard containers and boxes.
Transport engineering dipped 1.8 per cent, dragged down by land and marine and offshore engineering segments, which declined 12.8 per cent and 24.9 per cent, respectively, with the latter seeing lower activity in the shipyards.
Within the same cluster, the aerospace segment rose 20.9 per cent, mainly boosted by increased production in aircraft components, as well as more maintenance, repair and overhaul jobs from commercial airlines.
Chemicals output fell 1.1 per cent compared with a year ago.
Within the cluster, the petroleum and petrochemicals segments expanded 11.3 per cent and 1.1 per cent, respectively. However, the other chemicals segment fell 5 per cent with lower output of fragrances, while the specialities segment declined 28 per cent due to decreased production in mineral oil additives and biofuels.