Singapore's manufacturing output falls 7.7% on-year in September
By Wong Siew Ying, Channel NewsAsia | Posted: 26 October 2009 2343 hrs
Singapore's manufacturing output falls 7.7% on-year in September
SINGAPORE: Singapore's manufacturing output declined by 7.7 per cent on-year in September, snapping two straight months of growth.
The pharmaceutical sector had worked like a magic pill, driving up Singapore's economy in the last two quarters. However, economists said the fourth quarter could be a different story given the volatility of the sector.
Latest numbers showed that biomedical output fell 13.9 per cent in September, after almost doubling the previous month – making it one key reason for the decline in Singapore's manufacturing output.
In the electronics sector, output declined by a marginal 1.1 per cent, and the total manufacturing output in the first nine months of this year contracted by 6.9 per cent from 2008.
However, observers said the data is unlikely to set off a bearish outlook for Asian economies going forward.
Mr Tai Hui, regional economist, Standard Chartered Bank said: "If you look at the data for Korea, China, Japan, etc, they are all on a gradually recovering path. So inventory restocking may have some influence over the coming months.
"But don't forget the base effect from last year - where output and exports just collapsed in November and December. That is going to give Asian data a very huge boost in terms of year-on-year comparison.
"So the inventory correction coming to an end, which is negative, could be offset by the base effect which is positive."
Economists added that the decline in Singapore's biomedical cluster masks the underlying improvement in other manufacturing sectors, like electronics and precision engineering segments. But it does not mean that there are no downside risks ahead.
Mr Tai said: "We could see a lot of volatility in economic data coming through from the US in the near term.
"Another key issue to watch out for is the currency market - where comments from China as well as market speculation on the role of the US dollar going forward, continues to create a lot of volatility. So, that in itself will have an impact on Asian financial markets."
Barring any major shocks, experts believe the outlook for the Singapore manufacturing sector in 2010 is good - due to new plant capacity and more foreign direct investments.
- CNA/sc
By Wong Siew Ying, Channel NewsAsia | Posted: 26 October 2009 2343 hrs
Singapore's manufacturing output falls 7.7% on-year in September
SINGAPORE: Singapore's manufacturing output declined by 7.7 per cent on-year in September, snapping two straight months of growth.
The pharmaceutical sector had worked like a magic pill, driving up Singapore's economy in the last two quarters. However, economists said the fourth quarter could be a different story given the volatility of the sector.
Latest numbers showed that biomedical output fell 13.9 per cent in September, after almost doubling the previous month – making it one key reason for the decline in Singapore's manufacturing output.
In the electronics sector, output declined by a marginal 1.1 per cent, and the total manufacturing output in the first nine months of this year contracted by 6.9 per cent from 2008.
However, observers said the data is unlikely to set off a bearish outlook for Asian economies going forward.
Mr Tai Hui, regional economist, Standard Chartered Bank said: "If you look at the data for Korea, China, Japan, etc, they are all on a gradually recovering path. So inventory restocking may have some influence over the coming months.
"But don't forget the base effect from last year - where output and exports just collapsed in November and December. That is going to give Asian data a very huge boost in terms of year-on-year comparison.
"So the inventory correction coming to an end, which is negative, could be offset by the base effect which is positive."
Economists added that the decline in Singapore's biomedical cluster masks the underlying improvement in other manufacturing sectors, like electronics and precision engineering segments. But it does not mean that there are no downside risks ahead.
Mr Tai said: "We could see a lot of volatility in economic data coming through from the US in the near term.
"Another key issue to watch out for is the currency market - where comments from China as well as market speculation on the role of the US dollar going forward, continues to create a lot of volatility. So, that in itself will have an impact on Asian financial markets."
Barring any major shocks, experts believe the outlook for the Singapore manufacturing sector in 2010 is good - due to new plant capacity and more foreign direct investments.
- CNA/sc
