<TABLE border=0 cellSpacing=0 cellPadding=0 width="100%"><TBODY><TR>June 27, 2009
MANUFACTURING DATA
</TR><!-- headline one : start --><TR>Verdict: Healthy
</TR><!-- headline one : end --><TR>Output for May up 2% after pharma surge; Singapore could emerge from recession this quarter, say economists </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Alvin Foo
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->UPBEAT manufacturing numbers for last month have given economists yet another reason to be more optimistic that Singapore can emerge out of the recession this quarter.
Manufacturing output, which accounts for about a quarter of the economy, rose 2 per cent from the figure a year earlier, helped largely by a sharp surge in the drugs cluster.
The number easily trumped the expectations of economists, who had tipped a 3 per cent decline. Last month's rise follows a revised 0.4 per cent gain in April - the first positive headline number since September last year.
However, last month's output was down 1.6 per cent over April's after seasonal adjustments, said the Economic Development Board yesterday.
CIMB-GK economist Song Seng Wun said: 'Singapore will probably be the first Asian country to be technically out of the recession, as advance estimates of second-quarter gross domestic product will likely show the economy expanding after four consecutive quarters of contraction.'
Standard Chartered Bank economist Alvin Liew said: 'Manufacturing may now even turn positive in the second quarter after contracting 26 per cent year-on-year in the first quarter.'
Last month, other indicators for the local manufacturing sector also showed signs of a turnaround.
The latest Purchasing Managers' Index released earlier this month showed factory output had increased for the first time since August last year.
Singapore's exports last month posted the smallest year-on-year decline since September last year, fuelling belief that the overall economy will achieve growth in the current second quarter over the previous quarter.
The key reason for yesterday's bright manufacturing data came from pharmaceuticals. Last month's overall output would have contracted 17.7 per cent if the biomedical sector had been excluded.
The drugs cluster, accounting for almost a fifth of factory output, soared 138.6 per cent on higher production of active ingredients and a low output in May last year. This aided a 120.4 per cent rise in the biomedical sector.
Mr Liew noted: 'The pharma sector is set to benefit from the H1N1 flu outbreak. Since Singapore has significant biomedical production capacity, it will benefit from the sharp increase in global demand for flu-combating drugs.'
However, all other key clusters were in retreat. Electronics slumped 22.3 per cent, while chemicals output dropped 17 per cent last month.
Transport engineering shrank 8.1 per cent last month after rising 14.3 per cent the previous month. Precision engineering was down by 23.6 per cent, and general manufacturing shrank 8.8 per cent.
'The gradual trend of recovery in the electronics cluster is still intact,' said Barclays economist Leong Wai Ho. 'Signs are also emerging that the recovery has started to broaden from electronics into the chemicals and precision engineering clusters.'
Singapore is not the only Asian economy to have seen improved production numbers recently. HSBC economist Robert Prior-Wandesforde noted that Taiwan's seasonally adjusted industrial production rose more than 22 per cent (non-annualised) between January and last month, while South Korean output is up 17 per cent between January and the latest available numbers for April.
[email protected]
POSITIVE SIGNS
'Singapore will probably be the first Asian country to be technically out of the recession, as advance estimates of second-quarter gross domestic product will likely show the economy expanding after four consecutive quarters of contraction.'
CIMB-GK economist Song Seng Wun
MANUFACTURING DATA
</TR><!-- headline one : start --><TR>Verdict: Healthy
</TR><!-- headline one : end --><TR>Output for May up 2% after pharma surge; Singapore could emerge from recession this quarter, say economists </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Alvin Foo
</TD></TR><!-- show image if available --><TR vAlign=bottom><TD width=330>
</TD><TD width=10>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->UPBEAT manufacturing numbers for last month have given economists yet another reason to be more optimistic that Singapore can emerge out of the recession this quarter.
Manufacturing output, which accounts for about a quarter of the economy, rose 2 per cent from the figure a year earlier, helped largely by a sharp surge in the drugs cluster.
The number easily trumped the expectations of economists, who had tipped a 3 per cent decline. Last month's rise follows a revised 0.4 per cent gain in April - the first positive headline number since September last year.
However, last month's output was down 1.6 per cent over April's after seasonal adjustments, said the Economic Development Board yesterday.
CIMB-GK economist Song Seng Wun said: 'Singapore will probably be the first Asian country to be technically out of the recession, as advance estimates of second-quarter gross domestic product will likely show the economy expanding after four consecutive quarters of contraction.'
Standard Chartered Bank economist Alvin Liew said: 'Manufacturing may now even turn positive in the second quarter after contracting 26 per cent year-on-year in the first quarter.'
Last month, other indicators for the local manufacturing sector also showed signs of a turnaround.
The latest Purchasing Managers' Index released earlier this month showed factory output had increased for the first time since August last year.
Singapore's exports last month posted the smallest year-on-year decline since September last year, fuelling belief that the overall economy will achieve growth in the current second quarter over the previous quarter.
The key reason for yesterday's bright manufacturing data came from pharmaceuticals. Last month's overall output would have contracted 17.7 per cent if the biomedical sector had been excluded.
The drugs cluster, accounting for almost a fifth of factory output, soared 138.6 per cent on higher production of active ingredients and a low output in May last year. This aided a 120.4 per cent rise in the biomedical sector.
Mr Liew noted: 'The pharma sector is set to benefit from the H1N1 flu outbreak. Since Singapore has significant biomedical production capacity, it will benefit from the sharp increase in global demand for flu-combating drugs.'
However, all other key clusters were in retreat. Electronics slumped 22.3 per cent, while chemicals output dropped 17 per cent last month.
Transport engineering shrank 8.1 per cent last month after rising 14.3 per cent the previous month. Precision engineering was down by 23.6 per cent, and general manufacturing shrank 8.8 per cent.
'The gradual trend of recovery in the electronics cluster is still intact,' said Barclays economist Leong Wai Ho. 'Signs are also emerging that the recovery has started to broaden from electronics into the chemicals and precision engineering clusters.'
Singapore is not the only Asian economy to have seen improved production numbers recently. HSBC economist Robert Prior-Wandesforde noted that Taiwan's seasonally adjusted industrial production rose more than 22 per cent (non-annualised) between January and last month, while South Korean output is up 17 per cent between January and the latest available numbers for April.
[email protected]
POSITIVE SIGNS
'Singapore will probably be the first Asian country to be technically out of the recession, as advance estimates of second-quarter gross domestic product will likely show the economy expanding after four consecutive quarters of contraction.'
CIMB-GK economist Song Seng Wun
