Singapore’s industrial production rose faster than expected in March from a year earlier, thanks to a continued surge in the electronics sector, data showed on Wednesday, pointing to a possible upward revision in the city-state’s first quarter GDP. Manufacturing output in March rose 10.2 percent from a year earlier, data from the Singapore Economic Development Board showed, exceeding the median forecast in a Reuters survey of a 7.1 percent expansion on-year.
Industrial production on a month-on-month and seasonally adjusted basis also rose more than expected at 5.0 percent in March. The median forecast was for a rise of 0.9 percent. “I’m cautiously optimistic… we are expecting the first half to look quite good. On the longer side of things, there will be some support as some (electronics) manufacturers will have new models, but it may not happen in a big way,” said UOB economist Alvin Liew.
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The electronics sector continued to shine in March, growing at 37.7 percent from the previous year. This is brought about by growing demand for the city-state’s tech products, analysts say, particularly in semiconductors, which output grew by more than half. This comes after industrial output rose at the same rate in February, at a revised 10.2 percent on-year. On a month-on-month seasonally adjusted basis, however, industrial output contracted a revised 5.8 percent.
Despite strong electronics exports, some analysts believe industrial production will begin to moderate in coming months because of lower regional demand. Singapore has been among a number of export-reliant Asian economies to benefit from a general uptick in global demand in recent months, with the city-state enjoying strong sales of its tech products but analysts say that the tech production cycle is starting to mature.
The economy has struggled over the past two years. In the first quarter of this year, gross domestic product shrank 1.9 percent from the previous three months and grew 2.5 percent from a year earlier. However, March’s manufacturing output numbers point to an upward revision in first quarter GDP, analysts say.
“It won’t go beyond 3 percent but if other sectors remain stable, we are looking at a revision of around 2.7 percent year on year”, Liew said. The country’s central bank has held its policy steady and warned of risks to the global outlook, even with recent improvements in exports and broad economic growth momentum.