Analysts forecast higher GDP following surprising industrial production results

The 7.6% surge of industrial production in March broke past analyst estimates.

Manufacturing output increased for the fifth straight month by 7.6% year-on-year in March, smashing analysts' expectations. Excluding biomedical manufacturing, output grew by 14.9%.

Electronics output hit a three month high at 33.7% growth in March, while the chemicals sector grew by 9.5%. Transport engineering, biomedicals, and general manufacturing lagged behind.

OCBC Treasury Research revised their GDP estimates upwards from 0.2% for the full year, to at least 0.8%.

"Looking ahead, given the low base a year ago with the start of the Circuit Breaker period and global lockdowns, the manufacturing outperformance is likely to sustain in the double-digit growth handle, partly due to base effects but also due to the green shoots recovery in the global economy, particularly for the major economies of the US and China," said Selena Ling, Head of Research and Strategy for OCBC Treasury Research.

UOB Global Economics & Markets Research had a higher GDP estimate at 0.9%.

"Given that industrial production rose by a faster-than-expected rate of 10.7% y/y in the first three months of 2021, Singapore’s GDP should expand by 0.9% y/y(+2.7% q/q sa)in 1Q21, up from Ministry of Trade & Industry’s advance estimates at 0.2% y/y (+2.0% q/q sa), assuming no major revisions to the services and construction sectors," said UOB Economist Barnabas Gan.

Moody's Analytics said Singapore's near-term prospects continue to be favorable given the government's ability to contain localized COVID-19 outbreaks and the ongoing vaccination rollout.