July's IP spurt raises hopes for sustained manufacturing recovery

UOB predicts a 7.6% average growth rate.

Singapore’s July industrial production (IP) expanded 2.7% y/y (-1.9% m/m SA), much better than consensus estimates of a smaller 1.8% expansion, and the contraction of 4.2% y/y in June. Excluding the biomedical manufacturing cluster, IP expanded by a stronger 3.6%y/y (-0.1% m/m SA).

"Overall, we think that July’s IP growth marks a good start that will contribute to a stronger on-year growth in Singapore’s manufacturing activity for the second half of 2013 and we are confident of its sustained recovery in the second half this year," said UOB in its flash notes comments after the July 2013 IP results were released.

"We are penciling an average growth rate of 7.6% y/y as we maintain our 2013 industrial production growth forecast at 2.5% and GDP growth of 3% at this point in time," it added.