Chart of the Day: Manufacturing output could taper amidst strong electronics production

Electronic exports have shrunk for 5 months straight despite high output.

This chart from UOB shows that despite the electronics cluster's high output in April (+11.3% YoY), the high base of the electronics cluster from 2017 may result in a slower pace of expansion in the months ahead.

The non-oil domestic exports (NODX) of electronic products, including the integrated circuits segment, had been contracting for five consecutive quarters. It contracted by 5.5% recently.

UOB economist Francis Tan added, "There is no reason to keep producing electronic products (which are intermediate goods and of no use to the end-consumer in its current state) without exporting them."

The monthly purchasing managers’ index by the Singapore Institute of Purchasing & Materials Management (SIPMM)  also showed that electronics purchasing managers have collectively reported the highest levels of inventories in 84 months (since April 2011), whilst new orders had been on a downtrend since a recent peak in November 2017.

"If such trends continue, production growth may slow further," Tan said.