April industrial production feared to be ugly

DBS is forecasting a 1.4% year-on-year contraction, the first since November 2009.

According to DBS Group Research, the drag from demand weakness and supply chain disruptions due to the calamity in Japan is likely to be manifested in the headline number and GDP growth is expected to be the weakest in the second quarter.

“High oil prices may have also taken a toll on production activity. Moreover, the pharmaceutical industry may be entering a cyclical soft patch after the surge in March. In fact, recent April non-oil domestic export performance has already provided a grim view on the outlook for the manufacturing sector in the second half of the year,” noted DBS.

Headline NODX figure recorded a decline of 1.8% year-on-year on the back of sharp plunge in electronics, but the impact is said to be unlikely to be long-lasting if the performance is due largely to the drag from Japan.