Singapore July manufacturing output falls, poses downside risks to growth outlook

Singapore’s manufacturing output fell during the month of July, turning from bad to worse and throwing signs that the country’s poor industrial sector poses downside risks to its growth outlook. Except for the electronics cluster, all other key clusters reported decline in their output.

Latest manufacturing output for July fell by 3.6 percent y/y. Barring biomedical, industrial output dipped by 2.0 percent. On a seasonally adjusted basis, output contracted by 4.0 percent m/m, on a seasonally adjusted basis. Excluding biomedical, output will be down by 4.8 percent.

In addition, July non-oil domestic exports plunged by 10.6 percent y/y. There is simply a lack of positive catalyst in the global economy that could potentially lift growth prospects for the manufacturing sector or the economy, DBS reported.

Notably, it was the manufacturing sector, riding on the back of a miraculous surge in biomedical that helped to prevent a GDP contraction while key services sector faltered in the second quarter. Meanwhile, if such sub-par manufacturing performance persists, a contraction in GDP in 3Q16 may be on the cards, the report further added.