Singapore’s factory output leapt ahead in October as the volatile pharmaceuticals sector stepped up production and electronics plants enjoyed a surge in demand from the United States, official data showed yesterday.
The government’s manufacturing output index jumped 16.3% from September, more than three times above financial market forecasts for a 5.4% gain.
“The trend is one of a strong recovery which is broadly in line with the rest of the region,” said Deutsche Bank economist Sanjeev Sanyal.
Asian exporters have been getting a boost from the fast-growing US economy, which saw an 8.2% annual rate rise in gross domestic product (GDP) in the July–September period, its strongest quarterly advance in more than 19 years.
The October output rise here followed September’s 11.9% drop, which economists said was caused by a production cut at the city-state’s growing number of pharmaceutical factories.
For the year to October, Singapore’s output grew 19.3%, powered by electronics, up 12.7%, and pharmaceuticals, up 209%.
Sanyal said Singapore’s economy was experiencing the effects of a structural shift towards drugs production and away from its reliance on electronics, but cautioned that this made the outlook more volatile.
A strong month of manufacturing output had been expected after Singapore’s Purchasing Managers’ Index (PMI) jumped 1.9% in October from September to 53.9, its biggest gain since March 2002 and fuelled by pre-Christmas demand from the United States.
From a year earlier, factory output was more than double market expectations of an 8.8% rise.
Production in the fast-growing but volatile biomedical sciences sector surged 151% from a year earlier.
“This was due to the different product mix of fine chemicals produced in these two months,” said the Economic Development Board, which released the data. – Reuters
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