Snaps
26 March 2024

Singapore’s industrial production sees surprise gain in February

Industrial production rose 3.8% YoY, driven by strong production of pharmaceuticals and petrochemicals  

Production fell in the biomedical, electronics and chemicals sectors, likely due to soft demand from global trade partners
Production in biomedical, chemical and aerospace transport helped drive last month's upside surprise
3.8%

YoY growth for industrial production

Higher than expected

February industrial production up 3.8%

Singapore’s industrial production rose more than expected, gaining 3.8%year-on-year compared to a median forecast of 0.5% YoY. From the previous month, industrial production jumped 14.2%, much stronger than expectations for a modest 2.1% rise.

Production in biomedical, chemical and aerospace transport helped provide the upside surprise and were up 27.4% YoY, 11.2% YoY and 37.3% YoY respectively.

Meanwhile, electronics rose at a more measured pace, up 2.6% YoY, with the drop in computer peripherals partially offset by a strong showing for consumer electronics and semiconductors. February’s 3.8% gain was a notable pickup from the 0.6%YoY increase reported in January.

Singapore industrial production up even after surprise dip for NODX

 - Source: Singapore Department of Statistics
Source: Singapore Department of Statistics

Upside surprise for IP welcome but too soon to indicate recovery

The better-than-expected gain for industrial production bodes well for the first quarter GDP report alongside a likely jump in retail sales in March. We had initially expected industrial production to report a modest increase given the disappointing non-oil domestic exports report for the same month.

It may still be too soon, however, to gauge whether the February surprise represents a strong turnaround for the sector and we may need to see a sustained pickup in external demand to help drive a similar pace of growth for industrial production in 2024.