Chart of the Day: Disappointing manufacturing figures to drag down GDP

No thanks to the poor performance of both electronics and the pharmaceutical industries.

DBS Group Research noted:

Final GDP growth figures for the third quarter are expected to be revised lower. Previous official advance estimates expect the economy to contract by 1.5% QoQ saar (1.3% YoY) in the quarter. But the actual figure due to be announced this Friday morning will most likely report a more severe drop of 3.0% QoQ saar (0.9% YoY).

Reason is simple. Production output growth in the manufacturing sector has been disappointing in September and growth momentum in the services is also likely to be more sluggish than earlier anticipated.

Indeed, the manufacturing sector is likely to have contracted by 0.9% YoY in the third quarter, against the advance estimate of a 0.7% expansion. Most of the drag came about from an unexpected decline in output growth in September when both electronics and the pharmaceutical industries performed poorly.